If the Fed does not take into account the additional policy channels available in an open economy, then ________ when conducting contractionary monetary policy
A) it is likely to increase GDP too little and cause a recession
B) it is likely to decrease GDP too little and inflation will persist
C) it is likely to decrease GDP too much and cause a recession
D) it is likely to increase GDP too much and inflation will persist
C
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An increase in shipments of currency from the Federal Reserve to commercial banks will
A) increase the money supply. B) increase bank reserves. C) reduce bank reserves. D) have no effect on bank reserves.
Which of the following is an example of a foreign direct investment?
a. A French company buying some stocks of an American company b. An American company deciding to buy a Japanese firm c. A Chinese investor purchasing bonds issued by the United States government d. An English national deposits money in an American bank