Assume a nation has a fixed exchange rate, and the central bank increases the required reserve ratio. What is the net effect on the monetary base (given fixed exchange rates)? Answer assuming all the adjustments have worked their way through the macroeconomic system, and it is in equilibrium
a. The monetary base rises.
b. The monetary base falls.
c. The monetary base is not affected in this example.
d. The monetary base can not change because of the "Impossible Trilogy."
e. The change in the monetary base is ambiguous.
.A
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Refer to Figure 4-3. Kendra's marginal benefit from consuming the third ice cream cone is
A) $13.00. B) $2.50. C) $1.50. D) $0.50.
In the Heckscher-Ohlin model, when there is international-trade equilibrium
A) the relative price of the capital intensive good in the capital rich country will be the same as that in the capital poor country. B) the capital rich country will charge less for the capital intensive good than the price paid by the capital poor country for the capital-intensive good. C) the capital rich country will charge more for the capital intensive good than the price paid by the capital poor country for the capital-intensive good. D) workers in the capital rich country will earn more than those in the poor country. E) the workers in the capital rich country will earn less than those in the poor country.