Under which of the following policies does the government enter the foreign exchange market and buy or sell foreign currency to influence the exchange rate of the domestic currency?
A. Devaluation or revaluation
B. Capital controls
C. Official intervention
D. Exchange controls
Answer: C
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a. are more likely to purchase insurance b. are less likely to purchase insurance c. are neither more nor less likely to purchase insurance d. are risk neutral
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Indicate whether the statement is true or false
Sam, a U.S. citizen, buys bonds issued by a Greek company that bottles olives. Sam's purchase is
a. foreign direct investment. By itself it increases U.S. net capital outflow. b. foreign direct investment. By itself it decreases U.S. net capital outflow. c. foreign portfolio investment. By itself it increases U.S. net capital outflow. d. foreign portfolio investment. By itself it decreases U.S. net capital outflow.
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a. Hilton decides on an across-the-board 5 percent increase in executive salaries. b. Hilton decides to eliminate all print advertising. c. Hilton signs a new contract with the Culinary Workers Union that requires the company to increase wages for all its kitchen workers. d. The federal government starts to levy a $5 room tax on all hotel rooms.