The effectiveness of the federal funds rate as an operating target is limited because
A) the Treasury often uses federal funds market.
B) reserve requirements often change.
C) the demand for reserves is difficult to predict.
D) the deposit expansion multiplier is difficult to predict.
C
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With fixed exchange rates, an increase in the foreign inflation rate, with constant income and domestic credit, will lead to
A) a change in the exchange rate. B) an increase in international reserves. C) a decrease in international reserves. D) no change in international reserves.
In the neoclassical growth theory
A) small differences in the saving rate or population growth cause large variations in per capita income. B) large differences in the saving rate or population growth rate cause small variations in per capita income. C) large differences in the saving rate or small differences in population growth cause large variations in per capita income. D) small differences in the saving rate or large differences in population growth cause large variations in per capita income.