If Federal Reserve notes and coins are $765 billion, and banks' reserves at the Fed are $8 billion, the gold stock is $11 billion, and the Fed owns $725 billion of government securities, what does the monetary base equal?
A) $765 billion
B) $773 billion
C) $776 billion
D) $744 billion
E) $1,509 billion
B
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A country will realize no gains from trade if
A) pre-trade and free-trade relative prices are identical. B) all countries employ the same technology. C) it does not have an absolute advantage in at least one good. D) its wage exceeds the world average. E) pre-trade and free-trade relative prices are not identical.
Which firm did the Treasury allow to fail during the financial crisis?
A) J.P. Morgan B) Bear Stearns C) Lehman Brothers D) American International Group (AIG)
If the nominal exchange rate e is foreign currency per dollar, the domestic price is P, and the foreign price is P*, then the real exchange rate is defined as
a. e(P/P).
b. e(P/P).
c. e + P/P.
d. e - P/P.
Suppose the domestic interest rate is 3% and that the foreign interest rate is 6%. And finally, assume that the domestic currency is expected to appreciate by 4% during the coming year. Given this information, we know that
A) individuals will only hold domestic bonds. B) individuals will only hold foreign bonds. C) individuals will be indifferent about holding domestic or foreign bonds. D) the interest parity condition holds.