Increased liquidity in the banking system occurs when ________
A) people buy more bonds
B) the demand for real money balances declines
C) banks buy more bonds from the central bank
D) all of the above
E) none of the above
E
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Higher costs result from a currency union when:
A) nations are economically dissimilar so that demand shocks affect each economy asymmetrically. B) nations are economically similar so that demand shocks affect each economy symmetrically. C) there is intense competition between the economies. D) the currency is pegged to the U.S. dollar.
The nominal rate of protection shows the extent to which the domestic price of imported goods exceeds
(a) what the price would be without tariffs. (b) the cost of intermediate inputs. (c) the social opportunity costs of the good. (d) the no-trade equilibrium price.