tb20 - Chapter 20 The International Financial System T...

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Unformatted text preview: Chapter 20 The International Financial System T Multiple Choice 1) A central bank _____ of domestic currency and corresponding _____ of foreign assets in the foreign exchange market leads to an equal decline in its international reserves and the monetary base. ( a ) sale; purchase ( b ) sale; sale ( c ) purchase; sale ( d ) purchase; purchase Answer: C Question Status: Previous Edition 2) A central bank _____ of domestic currency and corresponding _____ of foreign assets in the foreign exchange market leads to an equal increase in its international reserves and the monetary base. (a) sale; purchase (b) sale; sale (c) purchase; sale (d) purchase; purchase Answer: A Question Status: Previous Edition 3) A central bank _____ of domestic currency and corresponding _____ of foreign assets in the foreign exchange market leads to an equal _____ in its international reserves and the monetary base. (a) sale; purchase; decline (b) sale; sale; increase (c) purchase; sale; increase (d) purchase; sale; decline Answer: D Question Status: Previous Edition 4) A central bank _____ of domestic currency and corresponding _____ of foreign assets in the foreign exchange market leads to an equal _____ in its international reserves and the monetary base. (a) sale; purchase; increase (b) sale; sale; decline (c) purchase; sale; increase (d) purchase; purchase; decline Answer: A Question Status: Previous Edition 710 Frederic S. Mishkin • Economics of Money, Banking, and Financial Markets, Seventh Edition 5) A central bank _____ of foreign assets in the foreign exchange market and corresponding _____ of domestic currency leads to an equal decline in its international _____ and the monetary base. (a) purchase; sale; reserves (b) sale; sale; liabilities (c) sale; purchase; reserves (d) purchase; purchase; reserves (e) purchase; purchase; liabilities Answer: C Question Status: Study Guide 6) A central bank sale of _____ to purchase ______ in the foreign exchange market results in an equal rise in its international reserves and the monetary base. (a) foreign assets; domestic currency (b) foreign assets; foreign currency (c) domestic currency; foreign assets (d) domestic currency; domestic currency Answer: C Question Status: Previous Edition 7) A central bank sale of _____ to purchase ______ in the foreign exchange market results in an equal decline in its international reserves and the monetary base. (a) foreign assets; domestic currency (b) foreign assets; foreign currency (c) domestic currency; foreign assets (d) domestic currency; domestic currency Answer: A Question Status: Previous Edition 8) A central bank sale of _____ to purchase ______ in the foreign exchange market results in an equal _____ in its international reserves and the monetary base....
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This note was uploaded on 10/17/2011 for the course ECON 317 taught by Professor Guidry during the Spring '11 term at Nicholls State.

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tb20 - Chapter 20 The International Financial System T...

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