In the Open-Economy Macroeconomic Model, Other Things the Same, When

question 14

True/False

In the open-economy macroeconomic model, other things the same, when a Canadian resident imports a foreign good, our model treats this as a decrease in the demand for dollars in the foreign-currency exchange market.

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Definitions:

Demand Deposits

Demand Deposits are bank account funds that can be withdrawn at any time without any advance notice to the bank.

Original Maturity

The initial fixed period for which a financial instrument, such as a bond or loan, is issued before it is due for repayment.

Required Reserves

The least amount of money that a bank is required to keep on hand as a safeguard for deposits, in compliance with the rules set by central bank authorities.

Demand Deposits

Bank account funds that are available on demand without any delay or penalties, like those in checking accounts.