Which of the following is NOT true of a fixed exchange rate system? 1. Foreign exchange...
Which of the following is NOT true of a fixed exchange rate system?
1. Foreign exchange reserves are costly.
2.It is good for business.
3.It makes pursuing domestic macroeconomic objectives easier.
4.It keeps a country from using inflationary policies.
Homework Answers
Request Answer!
We need at least 10 more requests to produce the answer.
0 / 10 have requested this problem solution
The more requests, the faster the answer.
Add Answer to:
Which of the following is NOT true of a fixed exchange rate
system?
1. Foreign exchange...
1. If a fixed exchange rate is set below the equilibrium rate in a fixed exchange...
1. If a fixed exchange rate is set below the equilibrium rate in a fixed exchange rate system it will create a deficit in the balance of payments. a surplus in the balance of payments. inflation. deflation. 2. Which of the following items is not a flow? A.Unilateral transfers. B. The increase in foreign assets held by Australian investors over a period of six months. C. Foreign exchange reserves lost by the Reserve Bank as a result of intervention in...
Suppose the real exchange rate is 10, the domestic price level is 8, and the foreign...
Suppose the real exchange rate is 10, the domestic price level is 8, and the foreign price level is 4. What is the nominal exchange rate? (3%) a. Suppose the real exchange rate rises by 10%, the inflation rate in the domestic b. country is 6%, and the inflation rate in the foreign country is 4%. By what percentage does the nominal exchange rate change? (3%) Suppose the nominal exchange rate rises by 5%, the real exchange rate rises by...
Which statement is true of a world with a system of fixed exchange rates as opposed to one with f...
Which statement is true of a world with a system of fixed exchange rates as opposed to one with floating rates? Multiple Choice It requires less world liquidity or reserves. It creates less confidence about future values of currencies. It facilitates the transmission of shifts in economic conditions between countries. It increases the role of the central banks in foreign exchange markets.
Using the information in this chapter, label each of the following statements true, false, or uncertain....
Using the information in this chapter, label each of the following statements true, false, or uncertain. Explain briefly. IF YOU ARE NOT GONNA ANSWER ALL OF THEM ABSTAIN FROM COMMENTING HERE. THANKS a.If the nominal exchange rate is fixed, the real exchange rate is fixed. b. When domestic inflation equals foreign inflation, the real exchange rate is fixed. c. A devaluation is an increase in the nominal exchange rate. d. Britain’s return to the gold standard caused years of high...
8: Under a fixed exchange rate system, the exchange rate is set by the authorities at...
8: Under a fixed exchange rate system, the exchange rate is set by the authorities at a given level. 9: The nominal exchange rate refers to the amount of local currency that individuals must give in order to buy one unit of a foreign currency. 10: A currency is said to have undergone a nominal depreciation if individuals that are holding that currency must provide fewer units of that currency to buy one unit of foreign currency 11: A currency...
QUESTION 4 Select all that are true regarding the balance of payments accounting: In a fixed...
QUESTION 4 Select all that are true regarding the balance of payments accounting: In a fixed exchange rate system the current and financial accounts will exactly offset since the exchange rate does not move In a perfectly flexible (freely floating) exchange rate system, there is no need for foreign reserves if world political economies are stable. A financial account deficit suggest that the country is increasing its debt A current account deficit allows a country to "live" beyond its means
Problem 1.(20 points) Which of the following statements are true? Which are false? Explain (for e...
Problem 1.(20 points) Which of the following statements are true? Which are false? Explain (for each statement) To prevent an appreciation of the Swiss Franc, the Swiss National Banks can sell foreign currency reserves in exchange for Swiss Francs. According to the monetary approach, an increase in domestic GDP growth rate will lead to a domestic currency depreciation. Monetary approach to determining exchange rates is more suitable for the short run analysis, rather than analysis on long horizons. Central banks...
Which of the following is true about a strict Currency board system? Multiple Choice ) The...
Which of the following is true about a strict Currency board system? Multiple Choice ) The currency board system enhances the ability of the government to print money Ο The government lacks the ability to set interest rates C ) A currency board system is govemed by the market forces of demand and supply C ) A currency boud cannot issue additional domestic notes and coins despite the presence of foreign exchange reserves to back Ο A currency board system...
QUESTION 3 Select all of the following that are true regarding interest rates and foreign exchange...
QUESTION 3 Select all of the following that are true regarding interest rates and foreign exchange rates: When domestic interest rates rise the domestic currency depreciates When a domestic currency depreciates, domestic interest rates rise Interest rate parity between countries is a reasonable assumption due to arbitrage and floating exchange rates When domestic interest rates rise due to monetary policy, the domestic currency appreciates solely because of the decreased supply of the domestic currency QUESTION 4 Select all that are...
answer these 4 . will rate after The exchange rate for a foreign currency that is...
answer these 4 . will rate after
The exchange rate for a foreign currency that is determined by supply and demand is O a constrained exchange rate. O a floating exchange rate. O a fixed exchange rate. O a controlled exchange rate. in bank An open-market purchase of government bonds by the Fed results in reserves and in the supply of money. O an increase; a decrease O a decrease; a decrease O an increase; an increase O a decrease;...
Suppose the real exchange rate is 10, the domestic price level is 8, and the foreign price level is 4. What is the nominal exchange rate? (3%) a. Suppose the real exchange rate rises by 10%, the inflation rate in the domestic b. country is 6%, and the inflation rate in the foreign country is 4%. By what percentage does the nominal exchange rate change? (3%) Suppose the nominal exchange rate rises by 5%, the real exchange rate rises by...
8: Under a fixed exchange rate system, the exchange rate is set by the authorities at a given level. 9: The nominal exchange rate refers to the amount of local currency that individuals must give in order to buy one unit of a foreign currency. 10: A currency is said to have undergone a nominal depreciation if individuals that are holding that currency must provide fewer units of that currency to buy one unit of foreign currency 11: A currency...
QUESTION 4 Select all that are true regarding the balance of payments accounting: In a fixed exchange rate system the current and financial accounts will exactly offset since the exchange rate does not move In a perfectly flexible (freely floating) exchange rate system, there is no need for foreign reserves if world political economies are stable. A financial account deficit suggest that the country is increasing its debt A current account deficit allows a country to "live" beyond its means
Which of the following is true about a strict Currency board system? Multiple Choice ) The currency board system enhances the ability of the government to print money Ο The government lacks the ability to set interest rates C ) A currency board system is govemed by the market forces of demand and supply C ) A currency boud cannot issue additional domestic notes and coins despite the presence of foreign exchange reserves to back Ο A currency board system...
QUESTION 3 Select all of the following that are true regarding interest rates and foreign exchange rates: When domestic interest rates rise the domestic currency depreciates When a domestic currency depreciates, domestic interest rates rise Interest rate parity between countries is a reasonable assumption due to arbitrage and floating exchange rates When domestic interest rates rise due to monetary policy, the domestic currency appreciates solely because of the decreased supply of the domestic currency QUESTION 4 Select all that are...
answer these 4 . will rate after
The exchange rate for a foreign currency that is determined by supply and demand is O a constrained exchange rate. O a floating exchange rate. O a fixed exchange rate. O a controlled exchange rate. in bank An open-market purchase of government bonds by the Fed results in reserves and in the supply of money. O an increase; a decrease O a decrease; a decrease O an increase; an increase O a decrease;...
Most questions answered within 3 hours.
-
The time to complete a standardized exam is approximately normal
with a mean of 70 minutes...
asked 1 hour ago -
Two thousand randomly selected adults were asked whether or not
they have ever shopped on the...
asked 1 hour ago -
Estimate the diffusion coefficient for methyl phenyl sulfide in
water at 25 degrees Celcius.
asked 1 hour ago -
10.g of a certain metal absorb 40. cal of heat and the temperature
is abserved to...
asked 2 hours ago -
How many milliliters of 0.0695 M Ca( OH)
2would be required to exactly neutralize 176 mL...
asked 2 hours ago -
A telephone survey uses a random digit dialing machine to call
subjects. The random digit dialing...
asked 3 hours ago -
How can having too little or too much of a certain
protein cause problems for an...
asked 4 hours ago -
Assume a muscle has a PCSA = 20 cm2 and Lo = 12 cm. Assume it...
asked 6 hours ago -
What is the yield to maturity of a ten-year, $1,000 bond with a
5.2% coupon rate...
asked 6 hours ago -
A mass m = 5 kg is tied on one end of a rope and is...
asked 6 hours ago -
The Average sales price of single-family houses in Charlotte is
$210,000 with a standard deviation of...
asked 7 hours ago -
Target Costing
Laser Impressions, Inc., manufactures color laser printers.
Model J20 presently sells for $225 and...
asked 7 hours ago