A country with an overvalued currency
A. will have a balance of payments deficit.
B. will suffer losses of foreign reserves.
C. must intervene in the foreign-exchange market to buy its own currency.
D. All of the above are correct.
Answer: D
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The figure above shows the market for college education. The efficient quantity of education is
A) 0 students. B) 4 million students. C) 6 million students. D) more than 6 million students. E) more than 4 million students and less than 6 million students.
Following the U.S. financial crisis in 2008, some observers assert that the policies of Fed Chairman Greenspan contributed to the crisis. Which of the following is a criticism of Greenspan's policies?
I. The very low interest rates used to fight the 2001 recession were maintained for too long, leading to the real estate bubble. II. The Fed provided real estate developers with liquidity to encourage property development and offered tax breaks to first-time home buyers, which in turn fueled the real estate bubble. III. The Fed did not promote appropriate regulations to deal with the new financial instruments that were created in the early 2000s. A) I and II only. B) I and III only. C) II and III only. D) I, II, and III.