To avoid the imposition of capital controls, a government wishing to keep its exchange rate at a certain level, may rely on:
a. forbidding all sales or purchases of foreign currency.
b. asking the large banks to keep the prices at a certain level.
c. asking for loans from the International Monetary Fund (IMF).
d. intervention in the foreign exchange market to raise or lower the exchange rate.
Ans: d. intervention in the foreign exchange market to raise or lower the exchange rate.
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If a country bans the importation of a particular good, the market equilibrium is shown by the intersection of the foreign demand curve and the domestic supply curve
Indicate whether the statement is true or false
Employing an additional 1 billion hours of labor increases real GDP by $12 billion. Employing another 1 billion hours beyond the first 1 billion increases real GDP by $11 billion
Hence we can conclude from this information that as employment increases, real GDP A) increases at an increasing rate. B) decreases at an increasing rate. C) decreases at a decreasing rate. D) increases at a decreasing rate. E) falls from $12 billion to $11 billion as more workers are hired.