Everything Else Held Constant,if a Central Bank Makes an Unsterilized

question 85

Multiple Choice

Everything else held constant,if a central bank makes an unsterilized ________ of foreign assets,then the domestic money supply will decrease and the domestic currency will ________.

• A)purchase;appreciate
• B)purchase;depreciate
• C)sale;appreciate
• D)sale;depreciate

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Definitions:

Output Supply

The total amount of a good or service that producers are willing and able to sell at a given price over a certain period of time.

Price

The financial expenditure needed to acquire a good or service.

Production Function

A mathematical representation of the relationship between inputs (like labor and capital) and the maximum output possible.

Profit Maximizing

The process or strategy employed by firms to increase their profits to the highest possible level by adjusting output, pricing, or other operational decisions.