If a nation merges its currency with another nation to create a single currency, what must it give up?
a. the ability to purchase currency in foreign exchange markets
b. the ability to determine its own nationally-oriented monetary policy
c. the ability to fight recessions and control inflations
d. the ability to sell currency in foreign exchange markets
b. the ability to determine its own nationally-oriented monetary policy
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Refer to Table 15-3. Consider the hypothetical information in the table above for potential real GDP, real GDP, and the price level in 2016 and in 2017 if the Federal Reserve does not use monetary policy
If the Fed wants to keep real GDP at its potential level in 2017, it should A) buy Treasury securities. B) decrease income taxes. C) sell Treasury securities. D) decrease the required reserve ratio.
Securities are ________ for the person who buys them, but are ________ for the individual or firm that issues them
A) assets; liabilities B) liabilities; assets C) negotiable; nonnegotiable D) nonnegotiable; negotiable
All of the following were actions taken by the government or the Fed in response to the Financial Crisis of 2007-2009 EXCEPT
A) purchasing of most toxic assets such as mortgage-backed securities. B) reducing the federal funds rate to near zero. C) insuring deposits in money market mutual funds. D) effective nationalization of Fannie Mae and Freddie Mac.
When a fixed exchange rate system is adopted, it results in all of the following except:
A) reduced uncertainty about exchange rate. B) decreased volatility in prices. C) increased volume of trade. D) decreased volume of trade.