If the stock market crashes, then
a. aggregate demand increases, which the Fed could offset by increasing the money supply.
b. aggregate demand increases, which the Fed could offset by decreasing the money supply.
c. aggregate demand decreases, which the Fed could offset by increasing the money supply.
d. aggregate demand decreases, which the Fed could offset by decreasing the money supply.
c
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Whenever nations remove capital controls on their currencies:
a. returns are equalized and arbitrage opportunities disappear. b. there is no opportunity for trade or arbitrage, and differences in returns disappear. c. the government sets the returns on its currency, so traders cannot make profits. d. in those nations, because government has ensured its safety, capital is free to move.
Which is NOT true of Globalization
A. it refers to increasing economic and cultural interdependency amongst countries B. it results in the financial ruin of some countries C. it potentially increases economic well-being among all countries involved D. it results in increasing competition, specialization, transmission of ideas.