Under a fixed exchange rate regime, if the domestic currency is initially undervalued, that is, above par, the central bank must intervene to sell the ________ currency by purchasing ________ assets
A) domestic; foreign
B) domestic; domestic
C) foreign; foreign
D) foreign; domestic
A
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When Ethan continues his education beyond high school, he is increasing his
A) human capital. B) capital. C) wage rate. D) rent. E) quantity of labor.
Assume that the expectation of declining housing prices cause households to reduce their demand for new houses and the financing that accompanies it. If the nation has highly mobile international capital markets and a flexible exchange rate system, what happens to the real risk-free interest rate and real GDP in the context of the Three-Sector-Model?
a. The real risk-free interest rate falls, and real GDP rises. b. The real risk-free interest rate and real GDP remain the same. c. The real risk-free interest rate rises, and real GDP falls. d. The real risk-free interest rate falls, and real GDP remains the same. e. The real risk-free interest rate falls, and real GDP falls.
Marginal cost increases as the quantity of output increases. This reflects the property of
a. increasing total cost. b. diminishing total cost. c. increasing marginal product. d. diminishing marginal product.
Which point or output-combination in the above graph could the nation produce only if it experienced inefficiency?
Combination F Combination E Combination C Combination G