If U.S. residents want to buy more foreign bonds, then in the market for foreign-currency exchange the exchange rate
a. and the quantity of dollars traded rises.
b. rises and the quantity of dollars traded falls.
c. falls and the quantity of dollars traded rises.
d. and the quantity of dollars traded falls.
c
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The percent increase in the CPI from one year to the next is a measure of the
A) real interest rate. B) inflation rate. C) GDP deflator. D) unemployment rate.
For the Cobb-Douglas utility function with two goods, the sum of the own price elasticities of demand must be:
a. 0. b. -1. c. -2. d. any number between 0 and -4.
Assume we have a simplified banking system in balance-sheet equilibrium. Also assume that all banks are subject to a uniform 10 percent reserve requirement and checkable deposits are the only form of money. A commercial bank receiving a new checkable deposit of $100 would be able to extend new loans in the amount of:
a. $10. b. $90. c. $100. d. $1,000.
Rapid economic growth is important because it
a. makes some people richer b. eliminates scarcity c. makes the unemployment rate zero d. allows the average person to consume more goods and services e. reduces interest rates