By lowering short-term interest rates, a central bank can stimulate economic activity A: since it encourages more investment spending B: since more durable consumption goods will be bought C: but only in the short run D: but it may lead to a higher price level E: all of the above

If a central bank wants to avoid high inflation in an economic boom it can A: try to lower investment spending though open market purchases B: raise interest rates in an effort to affect aggregate supply C: lower bank reserves by buying government bonds D: decrease the level of potential GDP by permanently restricting money supply growth E: none of the above

The core of the European monetary system is( ) A: European Currency Unit B: European central exchange rate system C: European Monetary Fund D: European Central Bank

The<br/>behavior of market prices over time show that natural resources () A: are<br/>a limit to economic growth. B: are<br/>unrelated to economic growth. C: are<br/>not a limit to economic growth. D: are<br/>the major determinant of productivity.

The impact of national interest rate on the exchange rate is ( ). A: up to compare factors such as foreign interest rate and domestic inflation rate. B: rising interest rates, rising currencies C: falling interest rates, falling currencies D: falling interest rates and rising currencies