Under a fixed exchange rate regime, if the domestic currency is initially ________, that is, ________ par, the central bank must intervene to purchase the domestic currency by selling foreign assets

A) overvalued; below
B) overvalued; above
C) undervalued; below
D) undervalued; above


A

Economics

You might also like to view...

Inflation targeting requires that the central bank

A) publicize its targeted inflation rate. B) avoid changing the amount of the monetary base. C) use a short-term interest rate as its policy instrument. D) set a fixed price real assets. E) adopt a k-percent rule for the inflation rate. The figure above shows the market for reserves.

Economics

A tit-for-tat strategy can be used in

A) a single-play game or a repeated game. B) a single-play game but not a repeated game. C) a repeated game but not a single-play game. D) neither a repeated game nor a single-play game.

Economics

An increase in quantity supplied is represented by a rightward shift of the supply curve

Indicate whether the statement is true or false

Economics

Use the concept of diminishing marginal utility to explain why we would be more likely to see an all you can eat pizza buffet rather than an all you can carry sunglass "buffet."

Economics