Explain why when Norway unilaterally fixes its exchange rate against the euro but leaves the krone free to float against the non-euro currencies, it is unable to keep at least some monetary independence
What will be an ideal response?
Any independent money supply change in Norway would put pressure on krone interest rates and thus on the krone/euro exchange rate. So by pegging the krone even to a single foreign currency, Norway completely surrenders its domestic monetary control.
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? In Figure 5-13, the consumer is better off
A. at A than at E. B. at B than at D. C. at any point on U2than at any point on U1. D. All of the responses are correct.
Spending VCU4 on real-world goods and services causes the nation's:
a. Demand for real goods and services to remain the same and monetary base to rise. b. Demand for real goods and services to rise and M2 money supply to rise. c. Demand for real goods and services to rise and M2 money multiplier to remain the same. d. Demand for real goods and services to remain the same and M2 money supply to rise.
An economy has two workers, Jen and Rich. Every day they work, Jen can produce 2 TVs or 10 radios, and Rich can produce 4 TVs or 12 radios. What is the opportunity cost for Jen to produce one TV?
A. 10 radios B. 1/5 radio C. 1/3 radio D. 5 radios
Suppose the consumer price index (CPI) for Year X is 130. This means the average price of goods and services is:
A. currently $130. B. 130 percent more in Year X than in the base year. C. 130 percent more in the base year than in Year X. D. priced at 30 percent more in Year X than in the base year.