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

question 112

Multiple Choice

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

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

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Definitions:

Perpetual Preferred Stock

A type of preferred stock with no fixed maturity date, often providing fixed dividend payments indefinitely.

Required Return

Required return is the minimum annual percentage earned by an investment that will induce individuals or companies to put money into a particular security or project.

Annual Dividend

This is the total amount of dividend payments a shareholder receives from a company in one year.

Long-Run Growth Rate

The sustainable rate at which a company or an economy can grow its output over a long period without increasing inflation.