Why are U.S. government securities referred to as a bank's secondary reserves?
A) Their current market value may count toward meeting a bank's legal reserve requirements.
B) They are very liquid.
C) Banks are legally required to hold a certain minimum amount of these securities.
D) They are the same thing as vault cash.
B
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Compared with France, who stayed in the ERM, what was the result of Britain's exit?
A) France's economy performed a bit better. B) Britain had an economic recession while France enjoyed an expansion. C) There was no significant difference. D) France had an economic recession while Britain enjoyed an expansion.
In the monetary small open-economy model with a fixed exchange rate, an increase in the world real interest rate
A) increases domestic output and has no effect on the domestic price level. B) decreases domestic output and has no effect on the domestic price level. C) increases the domestic price level and has no effect on domestic output. D) decreases the domestic price level and has no effect on domestic output.