When a central bank buys foreign assets,
A) its holdings of foreign assets rise by the amount of the purchase, but the monetary base is unaffected.
B) its holdings of foreign assets and the monetary base rise by the amount of the purchase.
C) its holdings of foreign assets rise by the amount of the purchase, and the monetary base rises by the amount of the purchase times the money multiplier.
D) the monetary base falls by the amount of the purchase.
B
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Refer to Table 4.1, which shows Flo's and Rita's individual supply schedules for frozen latte-on-a-stick. Assuming Flo and Rita are the only suppliers in the market, if the market quantity supplied is 3, the price must be
A) $0. B) $2. C) $4. D) $5.
Explain the difference between substitutes and complements
What will be an ideal response?