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

question 22

Multiple Choice

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

• A)increase;appreciate
• B)increase;depreciate
• C)decrease;appreciate
• D)decrease;depreciate

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Definitions:

Law of Demand

The law of demand states that, all else being equal, there is an inverse relationship between the price of a good and the quantity demanded by consumers.

Pepperoni Pizza

A popular pizza variety topped with pepperoni slices, cheese, and tomato sauce, loved for its spicy and savory flavor.

Anchovy Pizza

A pizza variety topped with anchovies along with other ingredients, often noted for its salty and strong flavor.

Indifference Curves

Graphical representations of different bundles of goods between which a consumer is indifferent, showing their preferences.