In a fixed exchange rate system
A) market forces and the country's stock of gold determine its exchange rate.
B) a central bank affects the value of a currency by changing its foreign exchange reserves.
C) market forces play a role in determining the fixed value of a currency.
D) the International Monetary Fund determines exchange rates.
Answer: B
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Which of the following is most frequently used when the Fed is attempting to adjust the money supply?
a. Changing reserve requirements b. Open market operations c. Changing the discount rate d. Moral suasion
If debt-financed less productive government spending crowds out more productive private investment, future generations will bear
A. All of the burden of the debt due to higher taxes. B. A portion of the burden of the debt relative to the population size. C. Some of the burden of the debt due to lower productive capacity. D. Zero burden as a result of the debt.