Which statement is true of a world with a system of fixed exchange rates as opposed to one with floating rates?
A. It requires less world liquidity or reserves
B. It creates less confidence about future values of currencies
C. It facilitates the transmission of shifts in economic conditions between countries
D. It increases the role of the central banks in foreign exchange markets
D. It increases the role of the central banks in foreign exchange markets
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Which of the following is not an example of a trade restriction?
A) quotas and voluntary export restraints B) tariffs C) consumer preferences for goods produced domestically D) legislation requiring that cars sold in a country have a 50 percent domestic content
The economy will grow from points B to G in Figure 10-3 above over time because
A) per person saving and steady state investment will remain stable at points C and D respectively. B) per person capital will grow, point D to E since per capita savings exceed steady state investment, point C is greater than point D. C) per person capital will grow, point D to E since per capita savings is less than steady state investment, point C is greater than point D. D) per person saving and steady state investment will remain stable at points D and C respectively.