Which of the following will cause Nation A's reserves account in the balance of payments to become more positive?
a. Increased holdings of official gold holdings.
b. Nation A's central bank receives more borrowing rights at the International Monetary Fund.
c. Nation A's central bank decreases its holdings of convertible foreign currencies.
d. All of the above will cause the reserves account to become more positive.
e. None of the above will cause the reserves account to become more positive.
.C
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Suppose the government of New Country has fixed the value of its currency, the New Peso, at $1 per New Peso, but the market equilibrium value of the New Peso is $2 per New Peso. In order to maintain the official value of the New Peso the Central Bank of New Country must either ________ domestic interest rates, or ________ the supply of New Pesos by purchasing or increasing their holding of international reserves.
A. lower; decrease B. raise; decrease C. raise; increase D. lower; increase
Exhibit 21-6 Dollars per British pound QuantityDemanded Dollarsper Pound QuantitySupplied 200 5 600 240 4 480 300 3 410 360 2 360 390 1 330 In Exhibit 21-6, the equilibrium exchange rate is:
A. 5. B. 4. C. 3. D. 2.
Refer to Figure 9.1. If the government establishes a price ceiling of $20, the resulting deadweight loss will be
A) $0. B) $20. C) $30. D) $300. E) $600.
Which of the following is an example of roundabout production?
a. Paul pays Ringo to wash his car. b. A church has a bake sale to raise money for a new narthex. c. Jane saves her money to buy a stereo. d. Robinson Crusoe makes a fish net to help him catch more fish per day. e. Business owners in Minneapolis buy blocks of Minnesota Twins baseball tickets to help guarantee that the team will stay in town.