Q U E S T I O N 1 5 1. What is a flexible exchange rate policy? A policy in which an exchange rate are determined in foreign exchange markets and governments do agree to fix them. A policy in which an exchange rate are determined in foreign exchange markets and governments do not agree to fix them. A policy in which an exchange rate are determined in financial markets and governments do not agree to fix them. A policy in which an exchange rate are determined in markets for goods and services and governments do not agree to fix them.

Q U E S T I O N 8 1. Between which episode is the federal funds interest rate the highest? episode 7-episode 8

episode 1- episode 2

What is the money demand? The relationship between real interest rate and the quantity of money individuals are willing to hold at each rate. The relationship between nominal interest rate and the quantity of money individuals are willing to hold at each rate. The relationship between real interest rate and the quantity of money our government is willing to hold at each rate. The relationship between inflation rate and the quantity of money individuals are willing to hold at each rate