"The South African Reserve Bank (Sarb) lifted the repo rate by 25 basis points on Thursday to 7.25%. Three MPC members preferred the announced increase, while two voted for a 50bps increase." In order to increase the repo rate by 25 basis points, a central bank will make use of which of the following policy instruments? O A. Open market policy B. Intervention in foreign exchange markets C. Public debt management D. Accommodation policy

"The South African Reserve Bank (Sarb) lifted the repo rate by 25 basis points on Thursday to 7.25%. Three MPC members preferred the announced increase, while two voted for a 50bps increase." In order to increase the repo rate by 25 basis points, a central bank will make use of which of the following policy instruments? O A. Open market policy B. Intervention in foreign exchange markets C. Public debt management D. Accommodation policy

Principles of Economics 2e

2nd Edition

ISBN:9781947172364

Author:Steven A. Greenlaw; David Shapiro

Publisher:Steven A. Greenlaw; David Shapiro

Chapter29: Exchange Rates And International Capital Flows

Section: Chapter Questions

Problem 25CTQ: If a countrys currency is expected to appreciate in value, what would you think will be the impact...

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Which of the following would be classed as an expansionary monetary policy? O A. A decrease in the quantity of money. В. A decrease in interest rates. С. An increase in government taxation. O D. An increase in government expenditure. O E. An increase in VAT.
"The South African Reserve Bank (Sarb) lifted the repo rate by 25 basis points on Thursday to 7.25% Three MPC members preferred the announced increase, while two voted for a 50bps increase In order to increase the repo rate by 25 basis points, a central bank will make use of which of the following policy instruments? OA Public debt management OB. Intervention in foreign exchange markets OC Accommodation policy OD. Open market policy Previous page Question B Not yet answered Marked out of 100 Flag question Next page
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 O C.a purchase of foreign currency will reduce money supply O D.a purchase of foreign currency will increase the nominal exchange rate
One of the undesirable effects of contractionary monetary policy is O O A) Higher unemployment. B) Higher inflation. C) Lower net exports.
Question 10 d Anwser only question d please thank you Assume that there is a free-floating exchange rate. Will the following cause sterling toappreciate or depreciate relative to other currencies? In each case, you should considerwhether there is a shift in the demand or supply curves of sterling (or both) and whichway the curve(s) shift(s). You may assume that the impacts are ceteris paribus, that is,everything else remains the same. Illustrate your answers and give a short explanation interms of currency supply and demand.(a) UK imports increase. (b) UK interest rates rise relative to those abroad. (c) The UK experiences lower inflation than other countries, but with no change in interestrates. (d) Forex speculators believe that the Pound sterling will depreciate.
Identify the primary actor in the European money market and briefly outlineits main role as participant. Identify also the four primary participants in the foreignexchange market.(b) Suppose that the European Central Bank had the view that the euro is overvalued relative to the dollar (i.e., the nominal exchange rate between the dollar and theeuro, E$/AC, is too high). How should the European Central Bank regulate the Europeannominal money supply to achieve a depreciation of the euro relative to the dollar?(c) Suppose that the dollar interest rate is 3% and the euro interest rate is 0.5%per year and that the interest parity condition holds in the dollar/euro foreign exchangemarket.(i) Explain the relationship between the interest rate difference and the expected appreciation of the euro against the dollar. By how many percentage is the euro expectedto appreciate?(ii) Suppose that the expected future exchange rate is Ee$/AC= 2.05. Obtain the currentequilibrium exchange rate that…
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1.. Consider the effect of the money supply change on the price and the expected exchange rate. Initially, MS = 500, P = 100 and Ee = 50CH/CF. Then, Home central bank changed the nominal money supply to 550. La. Suppose that the change is only temporary. Answer the price Pand the expected exchange rate E. P: E: 1.b. Suppose that the change is permanent. 1.b.i. Answer the values of P and E in the short-run. Short-run P: Ee: 1.b.ii. Answer the values of P and E in the long-run. Long-run P: Ee:
The goal of U.S. monetary policy, as conducted by the Federal Reserve (the Fed), is to stabilize the nation's economy. It does this by O regulating the nation's money supply and the cost of borrowing money by adjusting interest rates O establishing a U.S. foreign policy goal to ensure the U.S. economy has a plentiful supply of oil from international markets O establishing more social welfare programs to address the nation's substantial poverty rate O adjusting the nation's taxing and spending policies through the annual fiscal year federal budget