If banks hold excess reserves, then the increase in the money supply that is brought about by an increase in demand deposits will not be as large as its potential

Explain how the government can help the economy avoid a coordination failure

What will be an ideal response?

In Ireland, a pint of beer costs 3 euros. In Australia, a pint of beer costs 4 Australian dollars. If the exchange rate is .8 euros per Australian dollar, what is the real exchange rate?

a. 4/2.4 pints of Irish beer per pint of Australian beer b. 3/3.2 pint of Irish beer per pint of Australian beer c. 3.2/3 pints of Irish beer per pint of Australian beer d. 2.4/4 pints of Irish beer per pint of Australian beer