Author Question: The Fed wants to keep the dollar at 0.80 euros per dollar. If the demand for dollars increases, ... (Read 23 times)

JMatthes

  • Hero Member
  • *****
  • Posts: 578
The Fed wants to keep the dollar at 0.80 euros per dollar. If the demand for dollars increases,
 
  A) the Fed sells dollars to increase the supply of dollars and maintain the exchange rate.
  B) the Fed conducts persistent intervention on one side of the market.
  C) the Fed buys dollars to increase the supply of dollars and maintain the exchange rate.
  D) the Fed buys dollars to decrease the supply of dollars and maintain the exchange rate.
  E) the Fed sells dollars to decrease the supply of dollars and maintain the exchange rate.

Question 2

If the currency drain ratio is zero, which of the following situations leads to the greatest total increase in the quantity of money?
 
  A) an increase in the monetary base of 250,000 when the desired reserve ratio is 15 percent
  B) an increase in the monetary base of 100,000 when the desired reserve ratio is 5 percent
  C) an increase in the monetary base of 120,000 when the desired reserve ratio is 10 percent
  D) an increase in the monetary base of 100,000 when the desired reserve ratio is 50 percent
  E) an increase in the monetary base of 200,000 when the desired reserve ratio is 20 percent



gstein359

  • Sr. Member
  • ****
  • Posts: 293
Answer to Question 1

A

Answer to Question 2

B



Related Topics

Need homework help now?

Ask unlimited questions for free

Ask a Question
 

Did you know?

According to the National Institute of Environmental Health Sciences, lung disease is the third leading killer in the United States, responsible for one in seven deaths. It is the leading cause of death among infants under the age of one year.

Did you know?

Patients who have undergone chemotherapy for the treatment of cancer often complain of a lack of mental focus; memory loss; and a general diminution in abilities such as multitasking, attention span, and general mental agility.

Did you know?

Only 12 hours after an egg cell is fertilized by a sperm cell, the egg cell starts to divide. As it continues to divide, it moves along the fallopian tube toward the uterus at about 1 inch per day.

Did you know?

Inotropic therapy does not have a role in the treatment of most heart failure patients. These drugs can make patients feel and function better but usually do not lengthen the predicted length of their lives.

Did you know?

Cancer has been around as long as humankind, but only in the second half of the twentieth century did the number of cancer cases explode.

For a complete list of videos, visit our video library