There Are Limits to the Ability of Monetary Authorities to Use

question 6

Multiple Choice

There are limits to the ability of monetary authorities to use sterilized intervention in the case of a surplus because:

• A)the central bank may be unwilling to increase its holdings of foreign currency.
• B)the pressure from foreign countries to allow the domestic currency to depreciate will lead to large losses.
• C)the central bank's ability to constantly obtain foreign currency for the sterilized intervention is constrained.
• D)the export level is fixed and it cannot be allowed to drop.

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Definitions:

Romanian Orphanages

Institutions in Romania, noted in studies for their impact on child development due to deprivation and neglect experienced by children.

Adopted

A person who has been legally taken by another family as their own child, granting them the same rights and privileges as a biological child.

Months

Units of time, typically used in calendars, that roughly correspond to the period of time it takes for the moon to orbit the Earth, commonly divided into 12 periods in a year.