Using the above figure, which of the following is CORRECT?
A) 1 guilder will sell for $2.
B) 1 dollar will sell for 1/2 guilder.
C) A shortage of guilders exists at an exchange rate above $0.60.
D) A surplus of guilders exists at an exchange rate above $0.60.
D
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Suppose the Fed increases the money supply. As a result of this, people go out and spend more money on consumer goods, increasing aggregate spending. This is known as a(n)
A) indirect effect of monetary policy. B) direct effect of monetary policy. C) indirect effect of fiscal policy. D) direct effect of fiscal policy.
In the generalized dividend model, the current stock price is the sum of
A) the actual value of the future dividend stream. B) the present value of the future dividend stream. C) the present value of the future dividend stream plus the actual future sales price. D) the present value of the future sales price.