When a Central Bank Buys Foreign Currency,its International Reserves ________

question 2

Multiple Choice

When a central bank buys foreign currency,its international reserves ________.

• A) decrease
• B) increase
• C) remain unchanged
• D) are difficult to determine

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Definitions:

Present Discounted Value

The present worth of a future amount of money or sequence of cash flows, calculated using a given interest rate.

Interest Rates

The cost of borrowing money, typically expressed as a percentage of the amount borrowed, charged by lenders to borrowers.

Expected Profits

The forecasted profit a business anticipates earning over a certain period, based on estimates of future revenues and costs.

Market Value

The amount of money a willing buyer would pay a willing seller for a good, service, or asset in the open market.