The buying and selling of foreign currency by the central bank is a trade policy whose objective is:
A. reducing purchases of assets abroad.
B. stabilizing the exchange rate against external shocks.
C. stabilizing the interest rate against foreign capital outflows.
D. promoting long term economic growth.
Answer: B
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Based on the figure below. Starting from long-run equilibrium at point C, a decrease in government spending that decreases aggregate demand from AD1 to AD will lead to a short-run equilibrium at__ creating _____gap.
A. B; no output B. D; an expansionary C. B; recessionary D. D; a recessionary
If a 5% increase in price leads to an 8% decrease in quantity demanded, demand is
a. perfectly elastic b. elastic c. unit elastic d. inelastic e. perfectly inelastic
If the demand for a good is very price elastic, the imposition of a tax on that good
a. places the largest portion of the burden on the sellers of that product b. places the burden of the tax equally on buyers and sellers c. places the largest portion of the tax on consumers d. will make demand more elastic than it was before the tax e. will make demand more inelastic than it was before the tax
What percentage of the non-farm labor force in the United States belonged to a labor union in 2012?
a. less than 10 percent b. approximately 11 percent c. approximately 28 percent d. more than 40 percent