If a country wants to keep the value of its currency fixed, then its central bank should
A) sell domestic goods when there is an increase in the supply of its domestic currency.
B) buy domestic goods when there is an increase in the supply of its domestic currency.
C) sell its domestic currency when there is an increase in the supply of that currency.
D) buy its domestic currency when there is an increase in the supply of that currency.
Answer: D
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The main reason why the traditional classical school ceased to be widely accepted was that: a. it did not reflect the realities of the modern economy. b. when Keynes received the Nobel Prize, the academic establishment started believinghis ideas
c. it could not explain the persistence of the high levels of unemployment seen during the Great Depression. d. it was too abstract to be completely understood. e. it could not explain the relationship between inflation and unemployment.
The perpetual state of insufficiency of resources to satisfy people's unlimited wants is
a. apparent only in poor countries b. a contradiction that cannot be resolved c. completely unrealistic d. present in modern economies, but not in the past e. the definition of scarcity