If a Central Bank Does Not Want to Allow the Domestic

question 50

Multiple Choice

If a central bank does not want to allow the domestic currency to depreciate,it will ________ international reserves by purchasing its currency,thereby ________ the monetary base and increasing the risk of higher unemployment.

• A)lose;decreasing
• B)lose;increasing
• C)acquire;decreasing
• D)acquire;increasing

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Definitions:

Percentage Change

A mathematical calculation that shows how much a quantity has increased or decreased in comparison to its previous value, expressed as a percentage.

Union Labor

Workforce that is represented by a union, which negotiates wages, working conditions, and other benefits on their behalf.

Production Cost

The total expense incurred in manufacturing a product or offering a service, including raw materials, labor, and overheads.

Final Product

A good or service that has completed all stages of production and is ready for consumption by the end-user.