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

question 69

Multiple Choice

Everything else held constant,if a central bank makes an unsterilized sale 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:

Parol Evidence

A legal rule that prevents parties to a written contract from presenting extrinsic evidence of terms of the agreement that contradict, modify, or vary the written terms.

Code

A set of rules or principles designed to regulate conduct or provide guidelines for behavior.

Indorsement

A signature, usually on the back of a check or other negotiable instrument, that transfers the rights of the document to another party or specifies conditions for its use.

Federal Reserve Board

The governing body of the Federal Reserve System, responsible for the United States' monetary policy.