When the central bank is focusing on internal balance, their main target in the economy is（）
A. a desired level of real GDP
B. a balance of payments equilibrium
C. a certain level of real money balances
D. reducing government debt
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When the short run effect of an increase in aggregate demand results in a rise in the nominal exchange rate（）
A. exchange rate overshooting has occurred
B. the policy assignment problem is the likely culprit
C. monetary and fiscal authorities must renegotiate their roles in the economy
D. the long run equilibrium has likely increased as well
To derive the external balance relationship under high capital mobility and floating exchange rates, an increase in government spending must be followed by（）
A. an increase in money stock to restore the balance of payments equilibrium
B. a decrease in money stock to restore the balance of payments equilibrium
C. a depreciation of the currency to restore the balance of payment equilibrium
D. a decrease in investment spending to restore the balance of payments equilibrium
Fundamentally, the reason for exchange rate overshooting is that（）
A. the price levels do not react as quickly as the exchange rate
B. the LM curve reacts more slowly than the IS curve
C. exchange rate markets react more slowly than domestic price levels
D. there is a lag in the reaction of markets to fiscal policy
__ is（are） the profits that a government receives because the value of money printed is greater than the cost of printing it（）
A. Seignorage
B. Money revenue
Currency gain
D. Printing income
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