In its function of controlling the money supply, the Fed does which one of the following?
a. Controls the money supply.
b. Clears checks.
c. Regulates banks.
d. Holds gold belonging to foreign governments.
e. All of these.
e
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If a U.S. dollar purchases 4 Argentinean pesos, and a gallon of milk costs $3 in the U.S. and 6 pesos in Argentina what is the real exchange rate?
a. 2 b. 3/2 c. 2/3 d. 1/2
Which of the following reduces the potential burden of an increase in debt on future generations?
a. the growth rate of output is high b. in response to increased debt, parents save more to leave their children larger bequests c. some current government spending benefits future taxpayers d. All of the above are correct.
The following table shows Alex's estimated annual benefits of holding different amounts of money. Average money holdingsTotal benefit$700$50$800$59$900$66$1,000$71$1,100$74How much money will Alex hold if the nominal interest rate is 8 percent? (Assume she wants her money holdings to be in multiples of $100.)
A. $900 B. $800 C. $700 D. $1,000
Which of the following is NOT included in the M1 money supply?
A. checkable and debitable accounts B. currency C. passbook savings accounts D. traveler's checks