Under a Managed Float,if U

question 33

Multiple Choice

Under a managed float,if U.S.GDP suddenly increased,which of the following actions would the Bank of England need to take in order to stop any movement in the dollar-pound exchange rate?

• A) Buy British pounds for dollars in order to shift the demand curve for pounds leftward
• B) Sell British pounds for dollars in order to shift the supply curve for pounds leftward
• C) Sell British pounds for dollars in order to shift the supply curve for pounds rightward
• D) Buy British pounds for dollars in order to shift the demand curve for pounds rightward
• E) Do nothing,since purchasing power parity will correct the situation in the short run.

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Definitions:

Depolarization

A reduction in the difference of electric potential across a cell membrane, leading to the possibility of producing an action potential.

Repolarization

The process by which cells restore their resting negative membrane potential after depolarization.

Cardiac Muscle Cells

Specialized muscle cells found in the heart that contract rhythmically and involuntarily to pump blood throughout the body.

Capillary Network

A complex intertwining of capillaries supplying organs and tissues with nutrients and oxygen and removing waste products.