Official intervention in the foreign exchange market to defend a fixed-exchange rate when the value of the country's currency is under downward pressure causes
A. no change in the liabilities of the central bank.
B. international reserve holdings to fall.
C. the domestic money supply to rise.
D. a downward pressure on the country's interest rates.
Answer: B
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An increase in consumer confidence will
A) not change autonomous consumption and rotate the consumption function downward. B) not change autonomous consumption and rotate the consumption function upward. C) increase autonomous consumption and shift the consumption function upward. D) decrease autonomous consumption and shift the consumption function downward.
High income countries with larger governments as a share of GDP have generally
a. grown less rapidly than their counterparts with smaller governments. b. experienced less deadweight losses resulting from taxes and/or government borrowing. c. seen the government decrease in size as real GDP rises. d. been able to be more economically efficient.