For a country to successfully maintain a fixed exchange rate value of its currency relative to another currency (for example, as is done when currencies are unified or pegged), it must
a. maintain a relatively high rate of inflation.
b. balance the government budget each year.
c. give up the independence of its monetary policy.
d. run a trade deficit.
C
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A $10 million open market sale will decrease the monetary base by
A) $10 million. B) $10 million times the money multiplier. C) $10 million divided by the money multiplier. D) an amount between $0 and $10 million, depending on the fraction of the purchase the public wishes to hold as currency.
Which of the following statements accurately characterizes pre-1820 wages?
a. Skilled workers in England received higher wages than U.S. skilled workers. b. The wage premiums paid to skilled workers in the U.S. were typically greater than those paid in England. c. Early immigration of primarily skilled workers tended to reduce the wages of skilled labor in the U.S. d. The pull on unskilled labor to enter agricultural pursuits led to lower wages for unskilled workers in the manufacturing sector.