From before the financial crisis began in September of 2007 to when the crisis was over at the end of 2009, the huge expansion in the Fed’s balance sheet and the monetary base did not result in a large increase in monetary supply because

The World Bank was established to:

Tennessee Co. conducts business in the U.S. and Canada. The net cash flows from Canadian operations are expected to be C$500,000 next year. The Canadian dollar is valued at about $.90. The net cash flows from U.S. operations are supposed to be $200,000. To reduce sensitivity of its net cash flows without reducing its volume of business in Canada, Tennessee Co. could:

Money Corp. frequently uses a forward hedge to hedge its Malaysian ringgit (MYR) receivables. For the next month, Money has identified its net exposure to the ringgit as being MYR1,500,000. The 30-day forward rate is $.23. Furthermore, Money’s financial center has indicated that the possible values of the Malaysian ringgit at the end of next month are $.20 and $.25, with probabilities of .30 and .70, respectively. Based on this information, the revenue from hedging minus the revenue from not hedging receivables is____.

An advantage of freely floating exchange rates is that a country with floating exchange rates is more insulated from unemployment problems in other countries.

The inflation rate in the U.S. is 3%, while the inflation rate in Japan is 10%. The current exchange rate for the Japanese yen (¥) is $0.0075. After supply and demand for the Japanese yen has adjusted in the manner suggested by purchasing power parity, the new exchange rate for the yen will be:

The FOMC finally moved to ________ on January 25, 2012, when it issued its “Statement on Long-Run Goals and Monetary Policy Strategy.”

The primary indicator of the Fed’s stance on monetary policy is

The premium on a pound put option is $.03 per unit. The exercise price is $1.66. The break-even point is ____ for the buyer of the put, and ____ for the seller of the put. (Assume zero transactions costs and that the buyer and seller of the put option are speculators.)

When currency options are traded over-the-counter and not standardized, there is ____ liquidity and a ____ bid/ask spread.