22. The quantity equation of money supply is not true if velocity is not constant.
True
False
24. A decrease in which of the following factors (from the perspective of the domestic country) would cause a depreciation of the domestic currency in the short run?
A. foreign interest rate
B. relative productivity
C. relative expected export demand
D. all of the above
27. According to both Keynes and Friedman, the demand for money decreases with a decrease in
A. the interest rate.
B. the return on bonds minus the return on money.
C. permanent income.
D. the spread between the interest rates on bonds and money.
28. According to the interest parity condition, the domestic interest rate falls if the _____ rises, ceteris paribus.
A. foreign interest rate
B. exchange rate
C. expected future exchange rate
D. none of the above
29. A difference between m1 and m2 is that m2 takes ____ into account.
A. excess reserves
B. the currency ratio
C. time deposits
D. coins and notes
22. The quantity equation of money supply is not true if velocity is not constant.
True
False
24. A decrease in which of the following factors (from the perspective of the domestic country) would cause a depreciation of the domestic currency in the short run?
| A. | foreign interest rate | |
| B. | relative productivity | |
| C. | relative expected export demand | |
| D. | all of the above |
27. According to both Keynes and Friedman, the demand for money decreases with a decrease in
| A. | the interest rate. | |
| B. | the return on bonds minus the return on money. | |
| C. | permanent income. | |
| D. | the spread between the interest rates on bonds and money. |
28. According to the interest parity condition, the domestic interest rate falls if the _____ rises, ceteris paribus.
| A. | foreign interest rate | |
| B. | exchange rate | |
| C. | expected future exchange rate | |
| D. | none of the above |
29. A difference between m1 and m2 is that m2 takes ____ into account.
| A. | excess reserves | |
| B. | the currency ratio | |
| C. | time deposits | |
| D. | coins and notes |
Related textbook solutions
Related questions
Select appropriate replacements for [a] and [b] in the following statement:
According to the purchasing power parity theory of exchange rates, if the domestic country'S [a] inflation rate decreases relative to its trading partners, then on foreign exchange markets [b].
| a |
[a]: trend; [b]: the domestic currency will appreciate over the trend. |
|
| b |
[a]: trend; [b]: the domestic currency will depreciate over the trend. |
|
| c |
[a]: cyclical; [b]: the domestic currency will appreciate when the domestic interest rate rises. |
|
| d |
[a]: cyclical; [b]: the domestic currency will appreciate when the domestic interest rate falls. |
