Money, Banking and Financial Markets Exam Questions With 100% Verified Answers
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Course
Money, Banking and Financial Mkt
Institution
Money, Banking And Financial Mkt
Money, Banking and Financial Markets
Exam Questions With 100% Verified
Answers
Which of the following is an advantage to money targeting? - answerThere is an immediate
signal on the achievement of the target
If the relationship between the monetary aggregate and the goal variable is weak, then...
The monetary policy strategy that provides the least accountability is - answer✔the implicit
nominal anchor
Which of the following is a potential operating instrument for the central bank? - answer✔The
monetary base
If the desired intermediate target is a monetary aggregate, then the preferred policy instrument
will be a(n) __________ variable like the _________. - answer✔reserve aggregate; monetary
base
The immediate (two-day) exchange of one currency for another is a - answer✔spot transaction
When te value of the British pound changes from $1.50 to $1.25, then the pound has _________
and the U.S. dollar has __________. - answer✔depreciated; appreciated
Everything else held constant, when a country's currency depreciates, its goods abroad become
_________ expensive while foreign goods in that country become _________ expensive. -
answer✔less; more
The _________ states that exchange rates between any two currencies will adjust to relect
changes in the price levels of the two countries. - answer✔theory of purchasing power parity
The theory of PPP (purchasing power parity) suggests that if one country's price falls relative to
another's, its currency should - answer✔appreciate in the long run
According to PPP (purchasing power parity), the real exchange rate between two countries will
always equal _________. - answer✔1.0
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