Which of the following statements is most correct?
A. A sterilized foreign exchange intervention will alter the composition of a central bank's assets and alter commercial bank reserves.
B. A sterilized foreign exchange intervention will leave the central bank's holdings of foreign reserves unchanged.
C. A sterilized foreign exchange intervention will not alter the composition of a central bank's assets.
D. An unsterilized foreign exchange intervention will alter commercial bank reserves.
Answer: D
You might also like to view...
Consider the market for nonalcoholic beers from the previous question. Cudweisers' price in a Nash equilibrium (assuming Bertrand competition in these differentiated beers) is about
a. 0.99 b. 1.09 c. 1.71 d. 2.55
Suppose Ernie gives up his job as a financial advisor for pets, for which he earned $30,000 per year, to open up a store selling spot remover to Dalmatians. He invested $10,000 of his savings, which had been earning 5 percent interest. This year's revenues in the new business were $50,000 and explicit costs were $10,000 . Calculate Ernie's economic profit
a. $10,000 b. $50,000 c. $20,000 d. $40,000 e. $9,500
Empirical research suggests that the steepness of the aggregate supply curve depends on the
a. size of the multiplier. b. interest rate. c. level of wage rate. d. amount of excess capacity in the economy.
If individuals behave irrationally in some circumstances, why do economists typically assume that they behave rationally? a. The assumption of rationality allows economists to make powerful statements that apply the majority of the time. b. The assumption of rationality was used before psychologists discovered ways in which individuals behave irrationally. c. The assumption of rationality is
used because economists do not understand principles of psychology. d. The assumption of rationality has yet to be refuted with scientific evidence.