When the Federal Reserve purchases treasury securities in the open market,
A. The sellers of such securities by new securities in the open market and there is an increase in bank reserves
B. The sellers of such securities deposits the funds in their banks and bank reserves increase
C. The buyers of those securities pay for them with checks drawn on their bank account and bank reserves increase
Ans: B. The sellers of such securities deposits the funds in their banks and bank reserves increase
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One of the more unique aspects of NAFTA compared with other preferential trade arrangements is the fact that the NAFTA countries have
A) similar cultures. B) fixed exchange rates. C) common borders. D) very different standards of living.
The Plaza Accord of 1985 announces that the
A) G-5 countries will intervene in the foreign exchange market to bring about a dollar appreciation. B) G-7 countries will intervene in the foreign exchange market to bring about a dollar depreciation. C) G-5 countries will intervene in the foreign exchange market to bring about a dollar depreciation. D) G-7 countries will intervene in the foreign exchange market to bring about a DM depreciation. E) G-5 countries will not intervene in the foreign exchange market unless the dollar needs to appreciate.
A country is said to have an absolute advantage in the production of a good when:
a. its opportunity cost of producing the good is lower than another country. b. it can produce the good using fewer resources than another country. c. it specializes in the production of the good. d. all of these.
It has been found that
a. less-developed countries have more equality of income distribution. b. more-developed countries have more equality of income distribution. c. only prior communist countries have more equality of income distribution. d. income distribution cannot be measured among countries with different political and economic systems.