Suppose the Canadian central bank wants to keep the exchange rate of the Canadian dollar with the U.S. dollar constant over time. An increase in the demand for Canadian goods by American residents will lead the Canadian central bank to
A) sell American goods in exchange for Canadian dollars.
B) buy more Canadian goods with Canadian dollars.
C) increase the demand for Canadian dollars in the foreign exchange market.
D) increase the supply of Canadian dollars in the foreign exchange market.
Answer: D
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Federal government purchases, as a percentage of GDP
A) have fallen since the early 1950s. B) have remained roughly the same since the early 1950s. C) rose from the early 1950s until the mid 1980s, and then fell. D) have risen since the early 1950s.
Autonomous aggregate expenditures decreases by $200 million, the marginal propensity to consume is 0.50, marginal propensity to invest is 0.25, and the marginal propensity to import is 0.10. Calculate the change in income
What will be an ideal response?
In the long-run, all costs are
a. Fixed costs b. Variable costs c. Sunk Costs d. Marginal Costs
The most effective and frequently used tool the Fed has to increase or decrease the economy's money supply is
a. open market operations b. changes in the legal reserve requirement c. changes in the discount rate d. changes in the federal funds rate e. moral suasion