When Monetary Policy Works Through Changes in the Real Exchange

question 5

Multiple Choice

When monetary policy works through changes in the real exchange rate,the effect is called

• A)disintermediation.
• B)the interest rate channel.
• C)the credit channel.
• D)the exchange rate channel.

---

Definitions:

Country Selection Return

The return attributed to the strategic selection of countries in which to invest, as opposed to stock selection or currency impact.

Benchmark

A standard or point of reference against which the performance of an investment, individual, or strategy can be measured.

EAFE

An acronym for Europe, Australasia, and Far East, indicating a stock index that represents major overseas equity markets.

EAFE Index

An index that represents the stock performance of developed markets outside of North America, providing a benchmark for international equity investments.