Under the monetary approach to the exchange rate
A) an interest rate decrease is associated with higher expected inflation and a currency that will be weaker on all future dates.
B) an interest rate increase is associated with higher expected deflation and a currency that will be weaker on all future dates.
C) an interest rate increase is associated with higher expected inflation and a currency that will be strengthened on all future dates.
D) an interest rate increase is associated with higher expected deflation and a currency that will be strengthened on all future dates.
E) an interest rate increase is associated with higher expected inflation and a currency that will be weaker on all future dates.
E
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When the Fed ________ securities in an open market operation, banks' reserves ________, and therefore lending ________
A) sells; increase; increases B) buys; increase; increases C) sells; decrease; increases D) buys; decrease; decreases E) buys; do not change; does not change
Education leads to external benefits because
A) the people who become better educated get better jobs. B) better educated people commit fewer crimes. C) better educated people are less lazy. D) little pollution is created when educating people. E) better educated people are more productive.