To force the value of the British pound to depreciate against the dollar, the Federal Reserve should:

Q: Those who say the growing current account deficit in the United States is not a significant problem…

A: A current account deficit means that increasing capital account surplus, which means that the…

Q: Suppose that the Reserve Bank of New Zealand believes the New Zealand dollar (NZD) is too weak and…

A: Facts in the given question: Reserve Bank of New Zealand believes the New Zealand dollar (NZD) is…

Q: If a country is having its currency pegged to the U.S. dollar (hard peg), and the confidence in the…

A: To defend its fixed rate against the dollar, the central bank should dip into its international…

Q: For each of the following monetary policy tools: A. The BSP buys securities in the open market. B.…

A: Monetary policy is the policy that is related to money and this policy is set by the central bank to…

Q: Shortly after the invasion of Ukraine, sanctions impeded the ability of the Russian central bank to…

A: Shortly after the invasion of Ukraine, sanctions impeded the ability of the Russian central bank to…

Q: Firms typically hedge their foreign exchange exposure to: A. Speculate on currency movements. B.…

A: C. Reduce the uncertainty of future cash flows. Firms frequently do business with other countries,…

Q: ABC Inc. is a U.S.-based MNC with net cash inflows of euros and net cash inflows of Sunland francs.…

A: Jonathan Inc has much higher exposure as compared to other firms as the negative correlation will…

Q: If the U.S. Treasury deposits income tax receipts into its account at the Federal Reserve, then

A: As per Bartleby honor code, when multiple questions are asked, the expert is required to solve the…

Q: 3. Consider the monetary neutrality. Suppose that the central bank changed the money supply.…

A: Money Neutrality is an economic theory which states that the change in the supply of money or stock…

Q: refinancing rate

A: The refinancing rate refers to the interest rate which is required to be paid by the banks when they…

Q: the treasury bonds in country A consistently yield more returns compared to those in country B, we…

A: The given problem relates to interest rate parity theory.

Q: Analyze and explain the current state of the international monetary system. Then, discuss the…

A: The international monetary system refers to the framework and rules that govern currency exchange…

Q: Which of the following is NOT a benefit of investing in ADRs? The dividends are received in U.S.…

A: answer.  American depositary receipt  is a certificate issued by a U.S. bank. ADRs is denominated in…

Q: Which of the following is NOT one of the Fed's monetary policy tools? A. The required reserve ratio.…

A: Several options have been listed as Fed's monetary policy tools. We have to find the one that's not…

Q: Central Banks, such as the Reserve Bank of Australia (RBA), typically employ contractionary monetary…

A: Central banks carry out different monetary policies to decrease inflation and increase interest rate…

Q: What are your views on dedollarization?

A: Dedollarisation is the process of substituting the US dollar currency which is used in trading oil…

Q: The pressures on the foreign exchange market are such that they cause the British pound to…

A: Currency Depreciation: In this question, the pressure on the foreign exchange market causes the…

Q: A British firm and a U.S. Corporation each wish to enter into a currency swap hedging agreement. The…

A: The correct option is (a).The British firm pays dollars to a swap dealer and receives pounds from…

Q: Some countries have low interest rates and appreciating currencies because     they are politically…

A: Some countries have low interest rates and appreciating currencies because -

Q: Your company located in the US imports raw materials from Europe. If the European Central Bank…

A: The term exchange rate refers to the rate at which the currency of one country is exchanged for…

Q: 1.Treasury bills are money market instruments that can be bought or sold at a discount or premium…

A: Treasury Bills are one of the money market instruments. They do not carry any coupon rate and are…

Q: Should the economy’s current fragile recovery gather momentum, it is likely the Federal Reserve will…

A: Federal bank had responsibility of monetary policy so do it by open market operations.

Q: Explain how multinational companies can reduce the foreign currency risk by hedging.

A: The multinational companies are exposed to the foreign currencies because they are operating in…

Q: The so-called “dual monetary policy mandate” of the Federal Reserve calls for setting conditions…

A: Federal reserve's monetary policy is aimed at bringing stability and such decisions are taken at…

Q: Which of the following statement is incorrect? O Currency crisis is more likely happen under the…

A: Fixed exchange rate and free-floating exchange rate system are two ways in which a country can set…

Q: Suppose now that the Federal Reserve wants to increase the monetary base by increasing bank reserves…

A: Open market operations versus discount loansConsider an expansionary open market operation. Suppose…

Q: What action should the Hong Kong Monetary Authority (which is acting as Central Bank for Hong Kong)…

A: Hong Kong Monetary Authority worked under the Banking Ordinance and the Exchange Fund Ordinanc, and…

Q: With a dirty float system, Answer 1. market forces and the countryƉs stock of gold determine…

A: The term exchange rate refers to the rate at which one country's currency is exchanged into another…

Q: c) In what three ways do commercial banks make a profit from the monetary system?

A: Note: This post has three distinct questions. The first has been answered below.

Q: Consider that, until the Federal Reserve System was created, there was no one single US currency.…

A: The question is based on the concept of monetary policy and currency management.

Q: To fight inflation, another monetary policy tool the Fed could use is to change the reserve…

A: Inflation is the continuous increase in prices of goods and this is not good for economy as whole.

Q: Consider a U.S. firm that deals in only one foreign currency, the peso. Fill in the blanks to…

A: If the peso depreciates, interest from investments in Mexico will likely decrease. This is because…

Q: Q (B) Which of the following statements about central bank objectives are​ true?   A. Central…

A: Central banks play a crucial role in ensuring economic and financial stability. They conduct…

Q: Monetary policy in Australia is implemented by the Reserve Bank, and currently is principally…

A: The role of Reserve Bank of Australia is  : i) Formulation of monetary policy, and  ii)…

Q: The questions about Risks when investing in another country

A: Transaction risk is the possibility that a person to a trade deal will lose cash due to an…

Q: What is likely to happen to an MNC in UK if the British pound appreciates:

A: An appreciation in the British pound can significantly impact the operations of multinational…

Q: Which of the following are reasons why an MNC might issue bonds in a particular foreign market?…

A: MNC would like to issue bonds in a particular foreign market when the interest rate in that country…

Q: oday, the U.S. and British interest rates as equally attractive to Swiss investors holding Swiss…

A: The exchange rate of currency depends on the interest rate of country against the interest rate of…

Currency Market

The currency market, also known as the foreign exchange market, consists of currencies worldwide. This market determines the rate of all currencies based on the buying and selling of forex. It is an over-the-counter market. It is the largest and most liquid market based on trade volume.