Make use of a graph of the foreign exchange market to show how the Brazilian Central Bank can use an unsterilized intervention to reduce the value of its currency, the real, in terms of the dollar
What will be an ideal response?
An unsterilized intervention by the central bank of Brazil results in lower Brazilian interest rates. As a result, the demand for reals decreases since fewer foreign investors will want to purchase Brazilian bonds and the supply increases as more Brazilians buy foreign bonds. The result is an decrease in the value of the real.
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The cost of risk is the same for everyone
Indicate whether the statement is true or false
Which of the following cannot be controlled precisely by the Federal Reserve?
A) Government securities held by the New York Federal Reserve B) The discount rate C) Reserve requirement ratios D) Total bank reserves
A corrective tax is intended to: a. cover the costs of negative externalities
b. increase the private benefits of consumption. c. increase the deadweight loss caused by negative externalities. d. increase the deadweight loss caused by positive externalities.
An increase in demand occurs when
A. quantity demanded is greater than quantity supplied. B. quantity supplied is greater that quantity demanded. C. the demand curve shifts upward and to the right. D. there is a leftward shift in the demand curve.