In 2007-2009, the Fed cut interest rates to limit the international financial crisis. What is the effect of this on velocity?
a. It will decrease.
b. It will increase.
c. It will remain constant.
d. Velocity is unrelated to interest rates.
a
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A price that discourages entry is called a
A) fair price B) limit price C) minimum price D) all of these choices
What happens to the Canadian M2 money supply if there is an excess demand of 100 million euros in the foreign exchange market and the central bank intervenes to offset the excess? Assume the M2 money multiplier is 3
a. The Canadian M2 money supply falls by 300 million euros worth of Canadian dollars. b. The Canadian M2 money supply rises by 300 million euros worth of Canadian dollars. c. The Canadian M2 money supply might fall or rise. d. The Canadian M2 money supply rises by 100 million euros worth of Canadian dollars. e. The Canadian M2 money supply falls by 100 million euros worth of Canadian dollars.