You are watching: Which one of the following statements is the most accurate?
Any main bank acquisition of assets automatically results in rise in the domestic money supply, if any main bank sale of assets immediately causes the money it is provided to decline.
If central banks space not sterilizing and the home nation has a balance of payments surplus, any type of associated boost in the home main bank"s foreign asset suggests an increased residence money supply.
If main banks are not sterilizing and also the home country has a balance of payments surplus, any associated diminish in a foreign main bank"s cases on the home country implies a diminished foreign money supply.
a mechanism in which federal governments may attempt to moderate exchange rate activities without keeping exchange prices rigidly fixed
Under a resolved exchange rate, main bank financial tools space powerless to influence the economy"s money it is provided or that is output
What is the expected dollar rate of return on dollar deposits if today"s exchange rate is $1.10 per euro, following year"s intended exchange rate is $1.165 per euro, the dollar interest rate is 10%, and also the euro interest rate is 5%?
A devaluation occurs as soon as the central bank raises the domestic currency price of international currency, E, and a revaluation occurs once the central bank lowers E.
Depreciation is a climb in E as soon as the exchange rate floats when devaluation is a rise in E as soon as the exchange rate is fixed
Appreciation is a fall in E as soon as the exchange price floats if revaluation is a fall in E as soon as the exchange rate is fixed.
Devaluation reflects a deliberate government decision when depreciation is an outcome of federal government actions and also market pressures acting together.
Revaluation shows a deliberate government decision while evaluation is result of federal government actions and market forces acting together.
Devaluation reasons a rise in output, a increase in main reserves, and also an expansion of the money supply.
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a sharp readjust in international reserves sparked through a change in expectations around the future exchange rate
speculative strikes on the currency or central banks purchase excessive quantities of federal government bonds.
Which of the following finest describes a deliberate government decision to lower the exchange rate, E?