Chapter 6
Government Policies toward the Foreign Exchange Market
1. __________ are in place when a country's government places restrictions on the conversion of the domestic currency into foreign currency or vice versa.
a. Exchange controls
b. Capital controls
c. Official interventions
d. Adjustable pegs
2. With a(n) __________, government allows the market to determine the exchange rate of a currency.
a. Adjustable peg
b. Dirty float
c. Managed float
d. 口语考试万能句子Clean float
3. Which of the following terms describes an exchange rate regime in which the government intervenes in the foreign exchange market in order to influence the market determined exchange rate?
a. Fully convertible.
b. Currency control.
c. Managed float.
小鸟的简笔画d. Clean float.
4. Which of the following terms is ud to describe an exchange rate regime in which the rate is fixed to a currency or basket of currencies?
a. Exchange controls.
b. Pegged exchange rate.
c. Managed float.
d. Fully convertible.
5. If a country with a relatively high inflation rate maintains a pegged exchange rate against the currency of a relatively low inflation country, very quickly the country will find:
a. Its currency will depreciate.
b. Its exports become more competitive on world markets.
c. Its currency will ll at a discount.
d. Its exports become less competitive on world markets.
6. Which of the following is NOT a means by which a country can defend a fixed exchang
e rate?
a. The government can buy or ll foreign currency in order to influence the actual exchange rate.
b. The government can allow the currency to float and the resulting market rate will be equal to the intended rate in the fixed exchange rate regime.
c. 梦见剃头发等比数列的和The government can impo a form of exchange control.
d. The government can alter domestic interest rates in order to influence short-term capital flows.
7. Pressures in the foreign exchange market are such as to cau the British pound to appreciate with respect to the U.S. dollar. If Britain is trying to maintain a fixed exchange rate with respect to the U.S. dollar, which of the following interventions will stem the pressures for appreciation of the pound?
a. Britain should ll pounds and buy dollars.
b. Britain should do nothing as a fixed rate will not change.
c. Britain should buy pounds and ll dollars.
d. Britain should decrea their money supply to contract the economy.
血酬定律8. Pressures in the foreign exchange market are such as to cau the British pound to depreciate with respect to the U.S. dollar. If the British government us unsterilized intervention in the foreign exchange market to maintain a fixed exchange rate with respect to the U.S. dollar , it can be concluded that:
a. The British money supply will fall.
b. The British money supply will ri.
c. The British money supply will remain unchanged.
d. Britain is gaining foreign rerves.
9. Pressures in the foreign exchange market are such as to cau the British pound to depreciate with respect to the U.S. dollar. If the British government us sterilized intervention in the foreign exchange market to maintain a fixed exchange rate with respect to the U.S. dollar:
苇塘
a. British monetary authorities will be printing money.
b. Britain will be running a surplus.
c. British monetary authorities will be lling bonds.
d. British monetary authorities will be buying bonds.
10. If a country's currency is _______, then it can borrow from other countries by issuing asts that will be held as rerves by the central banks of other countries.
a. Pegged
b. Floating
c. A rerve currency
d. Depreciating
11. If a country faces a fundamental diquilibrium in its balance of payments, which of the following options can the country employ?
I. Sterilize the surplus or deficit.
II. Contract (inflate) the economy to get rid of the deficit (surplus).
III. Allow the exchange rate to float.
a. I
燕窝的做法步骤b. I and II
c. II and III
d. I, II and III
Figure 20.1: The Foreign Exchange Market
12. Referring to Figure 20.1, assume that the British government is committed to maintaining a fixed exchange rate at $1.90 per pound. In the autumn-winter period, what t
ype of intervention must British monetary authorities engage in?
a. Sell 20 billion pounds at $1.90.
b. Sell 60 billion pounds at $1.60.办公室年终总结
c. Buy 10 billion pounds at $1.60.
d. Buy 20 billion pounds at $1.90.
13. Referring to Figure 20.1, in the autumn-winter period, what is the social gain if the British government maintains a fixed exchange rate at $1.90 per pound?
