In a reserve currency system (such as the Bretton Woods system or the European ERM), currencies peg to a reserve currency. As a result:
A) only the reserve currency country has monetary autonomy.
B) all countries, other than the reserve currency country, have monetary autonomy.
C) all countries have monetary autonomy.
D) no country has monetary autonomy.
Ans: A) only the reserve currency country has monetary autonomy.
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Suppose you withdraw $500 from your checking account deposit and bury it in a jar in your back yard. If the required reserve ratio is 10 percent, checking account deposits in the banking system as a whole could drop up to a maximum of
A) $0. B) $50. C) $500. D) $5,000.
If electric utilities continually reduce their emissions of sulfur dioxide
A) the utilities will eventually be forced to go out of business. B) the marginal cost of further emissions will rise. C) the marginal benefit of additional emissions will rise. D) the total benefit of sulfur dioxide emissions will fall.