____ 6. The creation of new bank reserves could lead to a multiple increase in t
ID: 1219246 • Letter: #
Question
____ 6. The creation of new bank reserves could lead to a multiple increase in the money supply.
____ 8. Contractionary monetary policy shifts the reserve supply schedule inward.
____ 14. Labor is defined as cheap only if its productivity is very low.
____ 15. There are at least three exchange rates between every pair of national currencies.
____ 16. If the price of the dollar changes from 100 Japanese yen to 120 Japanese yen, the dollar has depreciated.
____ 17. When a government intentionally lowers the value of its currency, that is called depreciation.
____ 18. Stock in a German corporation can be purchased directly with currency from any other country.
____ 19. The price of a currency will decrease when quantity demanded is less than quantity supplied.
____ 20. Inflation plays a major role in determining whether a currency is appreciating or depreciating.
____ 21. The Big Mac index uses prices of a common item to predict long-run changes in exchange rates.
____ 22. Interest rate differentials can cause rapid fluctuations in short-run exchange rates.
____ 23. When a government influences the exchange rate of its currency, it is said to be practicing "dirty floating."
____ 24. The currency of the European Union, the euro, was established as part of the Bretton Woods agreements.
____ 25. An increase in the U.S. price level will increase U.S. net exports.
____ 26. An exchange rate appreciation will shift the aggregate demand curve inward.
____ 27. A depreciation of the U.S. dollar has the same effect on aggregate supply as an increase in foreign prices.
____ 28. A depreciation of the dollar will cause an increase in the Consumer Price Index.
____ 30. A currency depreciation is usually inflationary.
Explanation / Answer
6T
8.T
14.F
15.F
16.F
17.F (DEVALUATION)
18.F
19.F
20.T
21.T
22.T
23.F
24.F
25.F
26.T
27.T
28.T
30.T
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