The "rules of the game" under the gold standard can best be described as which of the following:
A) selling domestic assets in a deficit and buying assets in a surplus.
B) slowing down the automatic adjustments processes inherent in the gold standard.
C) selling domestic assets in order to accumulate gold.
D) selling foreign assets in a deficit and buying foreign assets in a surplus.
E) selling domestic assets in a surplus.
A
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When a country's real exchange rate appreciates,
A) its nominal exchange rate must also have appreciated. B) its nominal exchange rate must have depreciated. C) it can trade its goods for fewer units of foreign goods. D) it can trade its goods for more units of foreign goods.
In a model with money neutrality, a 10% increase in the money supply leads to an increase of output by
A) more than 10%. B) 10%. C) less than 10%, but more than zero. D) zero.
What is the shape of the modern short-run aggregate supply (SRAS) curve? Why?
What will be an ideal response?
The argument that import restrictions save jobs and promote prosperity fails to recognize that
A) import restrictions cannot create jobs in any industry. B) import restrictions cannot create jobs in any industry. C) there are no secondary effects of import restrictions. D) import restrictions will lower prices in the protected industries.