Free-floating exchange rates are determined by the
A. policies of the domestic government.
B. policies of foreign governments.
C. forces of demand and supply in the foreign exchange market.
D. forces of demand and supply in the domestic money market.
Ans: C. forces of demand and supply in the foreign exchange market.
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Everything else held constant, a monetary contraction is characterized by ________ output and ________ interest rates
A) rising; rising B) rising; falling C) falling; rising D) falling; falling
The buying and selling of government bonds by the FOMC constitutes:
a. an open market operation. b. a federal funds adjustment. c. a discount rate adjustment. d. a change in the reserve requirement. e. sterilization of the money supply
Suppose that an economy grows by 6 percent, total factor productivity grows by 4 percent, and the capital stock increases by 2 percent. If labor and capital are the only inputs used in production, and capital contributes 25 percent to GDP, then the labor force has risen by _____
a. 1.5% b. 2% c. 4% d. 6% e. 8%
What happens to the money multiplier when the reserve requirement increases from 20% to 25%?
a) It stays the same. b) It increases from 20 to 25. c) It decreases from 5 to 4. d) It falls to zero.