Following an expansion of the money supply, a government committed to
maintaining a fixed exchange rate must ____.
A: accept a surplus in its current account.
B: not use sterilized intervention.
C: increase its level of government expenditure and autonomous
investments.
D: intervene in the foreign exchange market to sell foreign currency and
buy domestic currency.
maintaining a fixed exchange rate must ____.
A: accept a surplus in its current account.
B: not use sterilized intervention.
C: increase its level of government expenditure and autonomous
investments.
D: intervene in the foreign exchange market to sell foreign currency and
buy domestic currency.
举一反三
- When<br/>the central bank allows the purchase or sale of domestic currency to<br/>have an effect on the monetary base, it is called A: an<br/>unsterilized foreign exchange intervention. B: a<br/>sterilized foreign exchange intervention. C: an<br/>exchange rate feedback rule. D: a<br/>money neutral foreign exchange intervention
- Under which of the following policies does the government enter the foreign exchange market and buy or sell foreign currency in order to influence the exchange rate of the domestic currency? A: Exchange controls B: Capital controls C: Official intervention D: Adjustable peg
- If the forward exchange rate, defined as the domestic currency price<br/>of the foreign currency, is smaller than the spot exchange rate,<br/>there is a ( ). A: forward premium on the foreign currency. B: forward discount on the foreign currency. C: shortage of dollars. D: surplus of dollars.
- In order to maintain exchange rate stability, central banks often intervene in the foreign exchange market by buying and selling foreign exchange. When the local currency exchange rate (), they sell foreign exchange and withdraw local currency. A: depreciates B: appreciates C: is fixed D: none of the above
- The measures that can be taken to reduce the current account deficit or improve the current account balance are ( ). A: Reducing consumption or investment expenditure B: Depreciation of the local currency exchange rate C: Cutting government expenditure D: Appreciation of the exchange rate of the local currency