The "discount rate" is the rate used by the Fed when
A) the Fed extends a short-term loan directly to a commercial bank.
B) the Fed extends a short-term loan to one of the regional Federal Reserve banks.
C) the Fed calculates the present value of particular long-term investment projects.
D) the Fed makes cash available for the federal government.
A
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Political tensions may arise from nations pegging to a center base country's currency if:
A) asymmetric shocks cause the home nation to lose the power to stabilize. B) it is determined that the center nation has been misrepresenting the value of its currency. C) financing of military spending becomes more difficult. D) interest rates are affected.
The price of a new textbook increased from $60 to $75 in one year, while the price of a used textbook increased by 25 percent. What happened to the relative price of a used textbook?
A) It increased by 25 percent. B) It increased by 10 percent. C) It remained constant. D) It can't be determined without knowing the nominal price of the used textbook in at least one of the years.