Everything Else Held Constant,if a Central Bank Makes a Sterilized

question 93

Multiple Choice

Everything else held constant,if a central bank makes a sterilized purchase of foreign assets,then the domestic currency will

• A)appreciate.
• B)depreciate.
• C)either appreciate,depreciate,or remain constant.
• D)not be affected.

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Definitions:

Compounding Frequency

Compounding frequency refers to the number of times per year that earned interest is added to the principal balance of an investment, affecting the total interest earned over time.

APR Interest

Annual Percentage Rate; a measure that reflects the total interest to be paid on a loan, mortgage, credit card, or other financial product, factored as an annual rate.

Monthly

Pertains to something occurring, produced, or settled every month.

Annual Discount Rate

The rate used to discount future cash flows to the present value, reflecting the time value of money and investment risk.