QUESTION 3 How are purchases or sales of foreign currency by a central bank are related to monetary policy? O A. a purchase of foreign currency will increase money supply B. a purchase of foreign currency will reduce the nominal exchange rate OC.a purchase of foreign currency will reduce money supply O D. a purchase of foreign currency will increase the nominal exchange rate

QUESTION 3 How are purchases or sales of foreign currency by a central bank are related to monetary policy? O A. a purchase of foreign currency will increase money supply B. a purchase of foreign currency will reduce the nominal exchange rate OC.a purchase of foreign currency will reduce money supply O D. a purchase of foreign currency will increase the nominal exchange rate

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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The the expected future exchange rate, the greater is the expected profit from holding dollars and so the A. lower; supply curve of dollars shifts rightward B. higher; supply curve of dollars shifts rightward C. higher; supply curve of dollars shifts leftward O D. higher; demand curve for dollars shifts leftward E. lower; demand curve for dollars shifts leftward O000O O
A Canadian traveling to the United States converts $100 Canadian into 80 U.S. dollars. One month later he does the same thing and receives only 86 U.S. dollars. There are no transactions costs. The Canadian-U.S. exchange rate has and the Canadian dollar has relative to the U.S. dollar. O A. fallen; appreciated O B. increased; appreciated O C. not changed; remained stationary OD. fallen; depreciated O E. increased; depreciated
6. In the exchange rate model in Example 7.2, supposethe company continues to manufacture its product inthe United States, but now it sells its product in theUnited States, the United Kingdom, and possibly othercountries. The company can independently set its pricein each country where it sells. For example, the pricecould be $150 in the United States and £110 in theUnited Kingdom. You can assume that the demandfunction in each country is of the constant elasticityform, each with its own parameters. The question iswhether the company can use Solver independently ineach country to find the optimal price in this country.(You should be able to answer this question withoutactually running any Solver model(s), but you mightwant to experiment, just to verify your reasoning.)
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QUESTION 5 How can a central bank support a fixed exchange rate? Note: Multiple answers are possible. O A. by buying and selling foreign currency O B. by changing the interest rate O C. by increasing government spending O D. by investing in infrastructure
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Pls select correct option and explain in 4-5 sentences ok.
QUESTION 3 How are purchases or sales of foreign currency by a central bank are related to monetary policy? OA. a purchase of foreign currency will increase money supply B. a purchase of foreign currency will reduce the nominal exchange rate C. a purchase of foreign currency will reduce money supply O D. a purchase of foreign currency will increase the nominal exchange rate
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Suppose a country's central bank announces that it is decreasing the long-run money growth rate to tame inflation. The country's currency will suddenly and its rate of depreciation will then O appreciate; rise O appreciate; fall O depreciate; rise O depreciate; fall
Suppose one British pound can purchase 1.86 U.S. dollars today in the foreign exchange market, and currency forecasters predict that the U.S. dollar will depreciate by 12.00% against the pound over the next 30 days. How many dollars will a pound buy in 30 days? a. $2.2082 O b. $2.3540 O c. $2.1665 O d. $2.0832 e. $1.8957
3. The impossible trinity Suppose the government of Iraq is deciding what kind of monetary policy and exchange rate regime to choose. The government wants to promote global integration by allowing capital to flow freely internationally. Which of the following policy choices will achieve this goal? Check all that apply. O Fixed exchange rate with independent monetary policy O Fixed exchange rate with no monetary policy autonomy O Control of the interest rate in the country and a floating exchange rate regime