An increase in capital inflows will
A) increase the equilibrium exchange rate.
B) increase net foreign investment.
C) increase capital outflows.
D) decrease capital outflows.
Ans: A) increase the equilibrium exchange rate.
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The Federal Reserve float is
A) items in process of collection - deferred credit items. B) items in process of collection + deferred credit items. C) deferred credit items - items in process of collection. D) deferred credit items + items in process of collection.
Assume the nominal dollar-per-euro ($/€) exchange rate appreciates by 2%, U.S. prices rise by 5% and Euro-Area prices rise by 3%. By approximately how much does the real exchange rate change?
a. There is no change. b. 1% c. 2% d. 3% e. 4%
The longest period of deflation in the U.S. in the 20th century was during World War II
Indicate whether the statement is true or false
The moral hazard problem caused by government safety nets:
A. only exists for banks with high leverage ratios. B. is pretty constant across banks of all sizes. C. is greater for larger banks. D. is greater for smaller banks.