Author Question: The Fed wants to keep the dollar at 0.80 euros per dollar. If the demand for dollars increases, ... (Read 87 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?

You should not take more than 1,000 mg of vitamin E per day. Doses above this amount increase the risk of bleeding problems that can lead to a stroke.

Did you know?

Before a vaccine is licensed in the USA, the Food and Drug Administration (FDA) reviews it for safety and effectiveness. The CDC then reviews all studies again, as well as the American Academy of Pediatrics and the American Academy of Family Physicians. Every lot of vaccine is tested before administration to the public, and the FDA regularly inspects vaccine manufacturers' facilities.

Did you know?

Chronic marijuana use can damage the white blood cells and reduce the immune system's ability to respond to disease by as much as 40%. Without a strong immune system, the body is vulnerable to all kinds of degenerative and infectious diseases.

Did you know?

After 5 years of being diagnosed with rheumatoid arthritis, one every three patients will no longer be able to work.

Did you know?

Children with strabismus (crossed eyes) can be treated. They are not able to outgrow this condition on their own, but with help, it can be more easily corrected at a younger age. It is important for infants to have eye examinations as early as possible in their development and then another at age 2 years.

For a complete list of videos, visit our video library