Everything else held constant, if a central bank makes an unsterilized ________ of foreign assets, then the domestic money supply will decrease and the domestic currency will ________
A) purchase; appreciate
B) purchase; depreciate
C) sale; appreciate
D) sale; depreciate
C
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Use the following diagram to answer the next question.
In the diagram, solid arrows reflect real flows and broken arrows are monetary flows. Flow (8) might represent
A. the services of firefighters. B. automobile purchases by the state of Maine. C. subsidies to farmers. D. personal income taxes.
Refer to the above figure. The arrows show the direction of a shift in the demand curve of Good A. Which of the following would be the most likely reason for the shift in the demand curve if Good A is an inferior good?
A) an increase in the price of Good A B) a decrease in the price of Good A C) a decrease in consumers' income D) an increase in consumers' income
When the Federal Open Market Committee buys government securities:
a. the reserve requirement of banks decrease. b. the reserve deposits of banks decrease. c. the excess reserves of banks increase. d. the federal funds rate increases. e. the legal reserves of banks decrease.
If a country has business opportunities that are relatively attractive to other countries, we would expect it to have
a. both positive net exports and positive net capital outflow. b. both negative net exports and negative net capital outflow. c. positive net exports and negative net capital outflow. d. negative net exports and positive net capital outflow.