Under a fixed exchange rate regime, if a central bank must intervene to purchase the domestic currency by selling foreign assets, then, like an open market sale, this action ________ the monetary base and the money supply, causing the interest rate
on domestic assets to ________. A) increases; rise
B) increases; fall
C) reduces; rise
D) reduces; fall
C
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The beginning point of a graph (the 0,0 point) is known as
a. ground zero. b. mother lode. c. the origin. d. square one. e. the beginning.
The problems of thin markets can be addressed by:
A. guaranteed price matching. B. increasing the number of sellers in the market. C. imposing price ceilings. D. warranties and repair guarantees.
Assume that the size of the underground economy increases both absolutely and relatively over time. As a result:
A. real GDP will rise more rapidly than nominal GDP. B. GDP will tend to increasingly understate the level of output through time. C. GDP will tend to increasingly overstate the level of output through time. D. the accuracy of GDP will be unaffected through time.
The total of producer and consumer surplus is maximized when there is underproduction.
Answer the following statement true (T) or false (F)