Under a Fixed Exchange Rate System,at Low Domestic Real Interest

question 1

Multiple Choice

Under a fixed exchange rate system,at low domestic real interest rates net capital outflows are ________,so the central bank ________ foreign-exchange reserves.

• A) positive; acquires
• B) positive; loses
• C) negative; acquires
• D) negative; loses

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Definitions:

Ocean Currents

Large-scale movements of seawater that circulate throughout the earth's oceans, driven by wind, salinity, and temperature differences.

Landscape Features

Natural and man-made formations or landmarks that characterize a specific area of land, including mountains, rivers, and forests.

Alluvial Fan

A low, gently sloping mass of sediment, shaped like an open fan or a segment of a cone; typically deposited by a stream where it exits a mountain range or joins a main stream.

Ice-Core Data

Data obtained from cylinders of ice drilled from glaciers or ice sheets, used to study past climates and atmospheric compositions.