According to the interest rate parity theory, when the forward foreign exchange rate is premium, it means that the domestic interest rate( ) A: is equal to the foreign exchange rate B: lower than foreign exchange rates C: higher than foreign exchange rates D: Not sure

If the domestic interest rate decreases, with the foreign interest rate and the expected future spot rate remaining unchanged, the value of the domestic currency vis-à-vis the foreign currency is expected to:

In a direct quotation, if the foreign currency is appreciating, the exchange rate __________.

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

Following an expansion of the money supply, a government committed to<br/>maintaining a fixed exchange rate must ____. A: accept a surplus in its current account. B: not use sterilized intervention. C: increase its level of government expenditure and autonomous<br/>investments. D: intervene in the foreign exchange market to sell foreign currency and<br/>buy domestic currency.