Assume a Central Bank Exchanges Its Currency for Other Foreign

question 16

Multiple Choice

Assume a central bank exchanges its currency for other foreign currencies in the foreign exchange market, but does not adjust for the resulting change in the money supply. This is an example of:

• A)pegged intervention.
• B)indirect intervention.
• C)nonsterilized intervention.
• D)sterilized intervention.
• E)A and D

---

Definitions:

Herbal Tea

A beverage made from the infusion or brewing of herbs, spices, or other plant material in hot water, often for their medicinal properties.

Blinding

A method used in research and experiments to prevent participants, and sometimes the researchers too, from knowing certain information that may lead to bias.

Lurking Variable

A variable that is not directly measured or controlled in a study but can affect the variables of interest, potentially leading to misleading conclusions.

Block Design

An experimental design in which the experimental subjects are divided into blocks before being randomly assigned to treatments, to reduce the effects of variability among them.