A . What action would a government take to keep its exchange rate from rising if demand for its currency increases? b. Why would a government want to keep its exchange rate from rising?
a . It would supply enough of its own currency to the foreign exchange market to counter the increase in
demand. This would keep the exchange rate from rising beyond a predetermined acceptable upper
limit.
b. In order to avoid the uncertainty introduced into international trade when exchange rates fluctuate, a
government would want to keep its exchange rate from rising.
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Under a fractional reserve banking system, banks are required to
(a) keep part of their demand deposits as reserves (b) expand the money supply when requested by the central bank (c) insure their deposits against losses and bank runs (d) pay a fraction of their interest income in taxes (e) charge the same interest rate on all their loans
A merger of several firms operating in different industries—for example, a trucking company, a fast-food chain, and a brokerage house—is called:
A. an integrated merger. B. a conglomerate merger. C. a vertical merger. D. a horizontal merger.