Suppose we were analyzing the Turkish lira per euro foreign exchange market. If there is the expectation that the euro will fall in value in the near future. As a result of speculators' actions the:spot
a. Supply of euros in the foreign exchange market falls, and the demand for euros in the foreign exchange market falls, causing an uncertain change in the value of the euro.
b. Supply of euros in the foreign exchange market rises, and the demand for euros in the foreign exchange market falls, causing an appreciation of the euro.
c. Supply of euros in the foreign exchange market rises, and the demand for euros in the foreign exchange market rises, causing an uncertain change in the value of the euro.
d. Supply of euros in the foreign exchange market rises, and the demand for euros in the foreign exchange market falls, causing a depreciation of the euro.
e. Supply of euros in the foreign exchange market falls, and the demand for euros in the foreign exchange market rises, causing an appreciation of the euro.
.D
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One characteristic of built-in or automatic stabilizers is that
A) they require no new legislative action by Congress to have an effect. B) they automatically produce surpluses during recessions and deficits during inflation. C) they have no effect on the distribution of income. D) they reduce the size of the public debt during times of recession.
A reduction in the required reserve ratio has the instant effect of:
a. Increasing the monetary base. b. Increasing total bank reserves c. Increasing excess reserves. d. Increasing bank shareholders' equity. e. Decreasing bank shareholders' equity.