A sterilized intervention is actually a combination of two transactions. What are they and what is the effect on the monetary base?
What will be an ideal response?
First there is the purchase or sale of foreign currency reserves, which by itself changes the central bank's liabilities. But this is immediately followed by an open market operation of exactly the same size, designed to offset the impact of the first transaction on the monetary base. Together, the two actions leave the level of reserves unchanged. An intervention is sterilized if it does not change the monetary base.
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In the above figure, the marginal revenue product is represented by line
A) "a." B) "b." C) "c." D) "d."
In Figure 13-3 above, suppose that the Fed maintains a fixed real money supply and that commodity demand is also fixed. The range of shifts in the LM curve, LM1 to LM2 lead to
A) an unstable equilibrium output, C to B1. B) a stable equilibrium output, C. C) an unstable equilibrium output, B0 to B1. D) a stable equilibrium output, B0 to B1.
One of the effects of a change in disposable income could not be a(n)
a. movement up along the consumption function. b. movement down along the consumption function. c. change in the amount of consumption expenditures. d. upward shift of the consumption function.
Economists define inflation as
The price of necessities like food and gasoline. How fast on average prices are rising in a given period of time The value of the dollar Average house prices in a given area