What happens to the monetary base if the domestic currency is undervalued (the central bank fixed the exchange rate below equilibrium) and the central bank intervenes to fix the exchange rate at its current level?
a. The change in the monetary base is ambiguous.
b. The monetary base is only affected by interventions of the central bank when the domestic currency is overvalued.
c. The monetary base will rise.
d. The monetary base is never affected by interventions of the central bank.
e. The monetary base will fall.
.C
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The above table gives information for the nation of North Hampton. There are no imports to or exports from North Hampton
a. Find aggregate planned expenditure for each level of real GDP. b. What is the equilibrium level of real GDP?
If an investment is 70 percent likely to return 10 percent per year and 30 percent likely to return 15 percent a year, then its average expected rate of return is:
A. 10.5 percent B. 11.0 percent C. 11.5 percent D. 12.5 percent