Foreign exchange reserves areMultiple Choicereferred to as FX reserves.obtained when the central bank sells local currency in exchange for foreign currency in the foreign exchange market.stockpiles of foreign currency maintained at the central bank.All of these choices are correct.

Foreign exchange reserves (FX reserves) play a crucial role in maintaining the stability and…

Answered: Foreign exchange reserves are Multiple…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Many forces affect the long-run cost structure of operating in two countries. One would be the differences between the price levels in a foreign country compared to the United States. How do you explain the foreign exchange market, fixed exchange rate system, flexible exchange rates, and international reserves?
Under a gold standard, countries should Group of answer choices keep the supply of their domestic money constant. keep the supply of their domestic money fixed in proportion to their gold holdings. keep the supply of foreign exchange less than their domestic money supply. restrict the demand for foreign goods. outlaw speculation.
Which one of the following statements is the MOST accurate? A temporary increase in a country's money supply causes a proportional long- run depreciation of its currency against foreign currencies. A permanent increase in a country's money supply causes a proportional long- run appreciation of its currency against foreign currencies. A permanent increase in a country's money supply causes a proportional short- run appreciation of its currency against foreign currencies. A permanent increase in a country's money supply causes a proportional long- run depreciation of its currency against foreign currencies. A permanent increase in a country's money supply causes a proportional short- run depreciation of its currency against foreign currencies.
Open Market Operations occur when the South African Reserve Bank: reduces spending B. buys and sells bonds and securities eC. increases taxation OD. increases the exchange rate
Suppose that the Fed implements an expansionary monetary policy under the fixed exchange rate regime. Which of the following will not occur? a) The government buy the domestic currency to keep the exchange rate. b) Interest rate will decline. (Incorrect) c) Money supply will increase for a while d) Monetary policy is effective.
This is not a writing assignment, this is a multiple-choice question To which of the below systems does he refer when he describes thus: Countries pledge to maintain the exchange rate for their currency at some predetermined rate of exchange with a country or a group of other countries. Group of answer choices Fixed exchange rates The value of a nation's currency is matched to the currency of another economy, as the Argentine currency was set equal to the U.S. dollar. The gold standard Floating exchange rates
You work for the Bureau of Economic Analysis (BEA) of the U.S. Department of Commerce. Your supervisor gives you the following U.S. International Transactions Accounts for the Year 20XX (figures are in billions of dollars) and wants it reported in a coherent fashion in accordance with accepted conventions: Investment income payments (27.3); Export of goods 80.6; Balance of services 5.1; Capital outflow (44.5); Imports of goods (110.9); Change in Official Reserves 2; Investment income receipts 24.7; Capital inflow 73.6; Net unilateral transfers (3.3). (a) He wants you to compute the balances of trade, current account, capital account and statistical discrepancy. (b) He also wants you to find out (based on your calculation) if the U.S. is a net debtor or a net creditor and why
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Foreign exchange reserves are Multiple Choice referred to as FX reserves. obtained when the central bank sells local currency in exchange for foreign currency in the foreign exchange market. stockpiles of foreign currency maintained at the central bank. All of these choices are correct.