What happens to the Canadian M2 money supply if there is an excess demand of 100 million euros in the foreign exchange market and the central bank intervenes to offset the excess? Assume the M2 money multiplier is 3
a. The Canadian M2 money supply falls by 300 million euros worth of Canadian dollars.
b. The Canadian M2 money supply rises by 300 million euros worth of Canadian dollars.
c. The Canadian M2 money supply might fall or rise.
d. The Canadian M2 money supply rises by 100 million euros worth of Canadian dollars.
e. The Canadian M2 money supply falls by 100 million euros worth of Canadian dollars.
.A
You might also like to view...
If a profit-maximizing firm finds that, at its current level of production, MR > MC, it will
A) earn greater profits than if MR = MC. B) increase output. C) decrease output. D) shut down.
The short-run aggregate supply curve (SRAS) slopes upward to the right because unexpected increases in prices will
a. increase aggregate demand as consumers buy more. b. decrease aggregate demand as consumers buy less. c. cause firms to expand output since the higher product prices will improve profitability. d. cause firms to reduce output since the higher product prices will decrease profit margins.