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- A central bank can allow its currency to fall indefinitely, but it cannot allow its currency to rise indefinitely. Why not?We learned that changes in exchange rates and the corresponding changes in the balance of trade amplify monetary policy. From the perspective of a nations central bank, is this a good thing or a bad thing?How would a contractionary monetary policy affect the exchange rate, net exports, aggregate demand, and aggregate supply?
- Answer the question according to the graph below. Dollar/euro exchange rate, Ese Esye Dollar return Dollar return 2" 2' Expected euro return 3' Expected euro return Ede Rates of return (in dollar terms) R R R L(A, Yus) L(Rg, Yus) Mis Pis Mis Ps US 4. U.S. real money supply Mis Pis Mus US Pus US U.S. real money holdings U.S. real money holdings Assume that the U.S. money supply is initially given at M-us, the price level is initially given at P'us, and the equilibrium exchange rate is initially at E's/e. Which of the following is TRUE when there is a temporary increase in the nominal money supply from M us to M²us in the long-run. US US Lütfen birini seçin: O A. The new equilibrium exchange rate will be higher than at E's/E O B. The new equilibrium exchange rate will be lower than at Ese O C. The new equilibrium exchange rate will be same with at E's/E O D. None of the answers.The monetary policy that malaysia are using during covid-19 in 2020. explainQUESTION 9 The goal of monetary policy is to O A. Set currency exchange rates O B. Set money supply C. Reduce the unemployment rate O D. Stimulate economic growth
- 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 rateExpansionary Monetary Policy and Fixed ER with perfect capital mobility in short run and long run. Explain.Choose the correct answer and give correct explaination 1. A central bank can fix an exchange rateA. In perpetuityB. Only for as long as the market believes that it has the political will to do so.C. Only for as long as it has reserves of goldD. Only for as long as it has independence of monetary policy.
- Economics 50 50.The Bank of Canada's monetary policy instrument is, A monetary policy instrument is, A. the monetary base; a variable that the Bank of Canada can directly control or closely target В. the overnight loans rate; a variable that the Bank of Canada can influence but not directly control C. the exchange rate; a variable that the Bank of Canada can influence but not directly control D. overnight loans rate; a variable that the Bank of Canada can directly control or closely targetEuropean Central Bank will keep its aggressive monetary stimulus that is, expansionary monetary policy in place, where as US will not continue to do so. "With the help of an equation", explain the effect of this on the long run depreciation of the US dollar1. One potential drawback of the gold standard is thatA. the world economy can be subject to deflationary pressure due to the limited supply of monetary gold.B. the world economy can be subject to inflationary pressure without changes in the supply of monetary gold.C. gold is scarce.D. all of the above Give typing answer with explanation and conclusion