Deficits that arise from discretionary fiscal policy lead to:
a. increased private demand for money, which is offset by the sale of more government securities
b. decreased private demand for money, which is offset by the sale of more government securities and higher interest rates
c. increases in the number of government securities sold to the public and higher interest rates.
d. decreases in the number of government securities sold to the public and higher interest rates.
e. increases in the public's demand for money and increases in the number of government securities sold to the public, leading to lower interest rates.
c
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Which resource is not an example of capital?
a. Stocks or bonds b. Machinery c. Equipment d. Physical plants
Maintaining a fixed exchange rate over the long run is today
A) virtually impossible. B) more vulnerable to speculative attacks than in the past. C) preferable. D) possible only in special cases such as maintaining strict capital controls. E) aided by technology which allows instant movement of money between financial markets in different countries.