Suppose $1 Canadian is worth 13 Mexican pesos, then a bike that costs $2,000 Canadian should sell for 30,000 pesos in Mexico

If a central bank does not want to allow the domestic currency to depreciate, it will ________ international reserves by purchasing its currency, thereby ________ the monetary base and increasing the risk of higher unemployment

A) lose; decreasing B) lose; increasing C) acquire; decreasing D) acquire; increasing

Which of the following is false?

a. The money supply times velocity equals the price level times real GDP b. If individuals are writing lots of checks on their checking accounts and spending currency as fast as they receive it, velocity will tend to be high. c. The magnitude of velocity does not depend on the definition of money that is used. d. Velocity equals nominal GDP divided by the money supply.