Which of the following is a component of money?
A) coins held by the nonbank public
B) bills held by banks
C) checkable deposits
D) all of the above
Answer: D) all of the above
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Which of the following is an example of a macroeconomic aggregate?
A) Total fixed cost faced by a firm B) Income earned by a household C) Profit earned by an entrepreneur D) The annual inflation rate
If the economy is not fully using its inputs, pumping money into the economy will put ________ pressure on interest rates and will tend to ________ output
A) upward; increase B) upward; decrease C) downward; increase D) downward; decrease
In the above figure, the movement from point C to point A is the result of
A) a decrease in the price of coffee. B) an increase in the price of coffee. C) a decrease in the price of gasoline. D) an increase in the price of gasoline.
If a bottle of fine French wine costs US$250 in the U.S., 2500 rand in South Africa, there are transaction costs of US$50, and the exchange rate is 20 rand/US$, then
A) there is an arbitrage opportunity by buying the wine in the U.S., and selling it in South Africa and the price in South Africa will drop. B) there is an arbitrage opportunity by buying the wine in South Africa., and selling it in the U.S. and the price in the U.S. will drop. C) here is an arbitrage opportunity by buying the wine in South Africa., and selling it in the U.S. and the price in the U.S. will rise. D) there is no arbitrage opportunity.