If a Central Bank Does Not Want to Allow the Domestic

question 108

Multiple Choice

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

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

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Definitions:

Predict

To make an educated guess about the future based on current data or trends.

Strength

Refers to the magnitude or intensity of a relationship between variables in a study.

One-Tailed

One-tailed tests in statistics specify a direction of the hypothesis, predicting either a positive or negative change but not both.

Statistically Significant

Indicating that a result from data analysis is not likely to occur by chance alone, according to a pre-determined significance level, and suggests true effects or differences.