What happens to the monetary base if the domestic currency is undervalued (the central bank fixed the exchange rate below equilibrium) and the central bank intervenes to fix the exchange rate at its current level?
a. The change in the monetary base is ambiguous.
b. The monetary base is only affected by interventions of the central bank when the domestic currency is overvalued.
c. The monetary base will rise.
d. The monetary base is never affected by interventions of the central bank.
e. The monetary base will fall.
Question 2 - Marx's point that under capitalism workers are divorced from capital is:
a. How socialism extracts surplus value
b. Dialectical materialism
c. Imperialism
d. Primitive capitalist accumulation
e. All of the above
Question 3 - An increase in the real risk-free interest rate causes the:
a. Preferred asset ratio for currency in circulation (C/D) to fall, which increases the quantity of real loanable funds supplied.
b. Preferred asset ratio for customary reserves (U/D) to rise, which increases the quantity of real loanable funds supplied.
c. Preferred asset ratio for near money (N/D) to fall, which increases the quantity of real loanable funds supplied.
e. None of the above.
Question 4 - What happens to the Canadian monetary base if there is an excess supply of 100 million euros in the foreign exchange market, which the Bank of Canada purchases?
a. The Canadian monetary base falls by 100 million euros worth of Canadian dollars.
b. The Canadian monetary base falls. The amount depends on the size of the money multiplier
c. The Canadian monetary base might fall or rise.
d. The Canadian monetary base rises by 100 million euros worth of Canadian dollars.
e. The Canadian monetary base rises. The amount depends on the size of the money multiplier.
Question 5 - In order to have a principal agent problem, there always must be
a. A market economy
b. A dictator and a subordinate
c. The principal has more information than the agent
d. The principal and agent have different goals
e. Both c and d are correct
Question 6 - A decrease in the real risk-free interest rate causes the:
a. Preferred asset ratio for currency in circulation (C/D) to rise, which increases the quantity of real loanable funds supplied.
b. Preferred asset ratio for customary reserves (U/D) to rise, which increases the quantity of real loanable funds supplied.
c. Preferred asset ratio for near money (N/D) to fall, which decreases the quantity of real loanable funds supplied.
e. None of the above.
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