Countries that borrow large amounts of money from foreign lenders prefer to:
A) hold an undervalued currency. B) hold an overvalued currency.
C) have a high rate of unemployment. D) have a low rate of inflation.
Suppose India borrows $10,000 from the U.S. at the beginning of 2012. The flexible exchange rate is 50 Indian rupees per dollar.
B
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If Veronica withdraws $1,500 from her checking account and deposits it in her savings account, then M1 will ________ and M2 will ________
A) decrease; increase B) increase; not change C) decrease; not change D) not change; not change
Higher interest rates and, therefore, a decrease in investment spending is most likely to be caused by which policy mix?
a. deficit reduction and expansionary monetary policy b. larger deficits and contractionary monetary policy c. larger deficits and expansionary monetary policy d. deficit reduction and contractionary monetary policy