In order to maintain exchange rate stability, central banks often intervene in the foreign exchange market by buying and selling foreign exchange. When the local currency exchange rate (), they sell foreign exchange and withdraw local currency.
A: depreciates
B: appreciates
C: is fixed
D: none of the above
A: depreciates
B: appreciates
C: is fixed
D: none of the above
举一反三
- Under which of the following policies does the government enter the foreign exchange market and buy or sell foreign currency in order to influence the exchange rate of the domestic currency? A: Exchange controls B: Capital controls C: Official intervention D: Adjustable peg
- If the forward exchange rate, defined as the domestic currency price<br/>of the foreign currency, is smaller than the spot exchange rate,<br/>there is a ( ). A: forward premium on the foreign currency. B: forward discount on the foreign currency. C: shortage of dollars. D: surplus of dollars.
- In a direct quotation, if the foreign currency is appreciating, the exchange rate __________.
- Spot exchange rate is the exchange rate at which a foreign exchange dealer will convert one currency into another currency on _________________. A: some occasion B: a particular day C: a spot D: a period
- The AA schedule shows________. ( ) A: Exchange rate and output pairs at which only the foreign exchange market is in equilibrium. B: Interest rate and output pairs at which only the foreign exchange market is in equilibrium. C: Interest rate and output pairs at which the foreign exchange market and the domestic money market are in equilibrium. D: Exchange rate and output pairs at which the foreign exchange market and the domestic money market are in equilibrium.