During Britain's brief alignment with the ERM from 1990-1992, the trilemma tells us that monetary policy authority no longer existed in Britain. Why?
A) Britain could print more pounds, but could not increase its gold stock.
B) Britain kept monetary growth rates at zero.
C) The British interest rate equaled the German rate to attain uncovered interest parity.
D) The British could lower unemployment using other means such as fiscal policy.
Ans: C) The British interest rate equaled the German rate to attain uncovered interest parity.
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If the dollar appreciates and foreign goods become less expensive, the total planned expenditures on domestic goods and services will
A) increase due to the open economy effect. B) fall due to the interest rate effect. C) fall due to the open economy effect. D) increase due to the interest rate effect.
The gold standard period was
A) up until the first world war. B) between the first and second world wars. C) following the second world war until 1970. D) between 1954 and 1970. E) between 1814 and 1865.