Which of the following best characterizes the current U.S. exchange rate policy?
A. A fixed exchange rate
B. A crawling pegged exchange rate
C. A freely floating exchange rate
D. An adjustable pegged exchange rate
Answer: C
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Suppose the economy is producing at the natural rate of output. An open market purchase of bonds by the Fed will cause ________ in real GDP the the short run and ________ in inflation in the short run, everything else held constant
A) an increase; an increase B) a decrease; a decrease C) no change; an increase D) no change; a decrease
Voluntary restraint agreements:
A. are prohibited by NAFTA. B. hurt consumers in both the short run and the long run. C. hurt workers in both the short run and the long run. D. do not affect imports in both the short run and the long run.
The principal mechanism for directly changing the reserves of the banking system is:
A. The discount rate. B. The reserve requirement. C. Open-market operations. D. The federal funds rate.
Use the following choices regarding the various types of unemployment to describe this situation. George was laid off by his trucking firm because of a recession.
A. Frictional unemployment B. Structural unemployment C. Natural unemployment D. Cyclical unemployment