If a country has a ________ exchange rate, its central bank must buy and sell its holdings of currencies to maintain a given exchange rate

Suppose the inflation rate in Zlanaga has shown an upward trend during the last five years, increasing from 5 percent to 10 percent. To combat inflation, the central bank of the country is likely to: a. lower the discount rate

b. decrease the reserve requirements. c. insure the deposits of customers. d. sell government bonds.

Suppose that the cross price elasticity of demand between goods A and B equals 1.25. Which of the following is TRUE?

A. Goods A and B are complements because the cross price elasticity is positive. B. Goods A and B are substitutes because the cross price elasticity is greater than one. C. Goods A and B are substitutes because the cross price elasticity is positive. D. Goods A and B are complements because the cross price elasticity is greater than one.