show by a diagram and also explain in detail how a decrease in expectations from US deposits held in UK banks will affect the pound sterling/US dollar ER
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show by a diagram and also explain in detail how a decrease in expectations from US deposits held in UK banks will affect the pound sterling/US dollar ER
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- The cash rate in Australia is a benchmark interest rate which is set by the Board of the Reserve Bank of Australia and has recently been at a record low. (a) State the cash rate announced at the September, 2021, meeting of the Board of the Reserve Bank of Australia. (b) If the cash rate were to increase, would you expect the Australian dollar to increase or decrease against most other currencies? Explain your answer. (c) If the cash rate were to decrease, would you expect the Australian dollar to increase or decrease against most other currencies? Explain your answer. (d) Explain why the cash rate is not expected to increase until 2024 at the earliest?Define a put and call on the British pound sterling.Which of the following must remain stable if money is to successfully function as a store of value? a. The exchange rate b. The net of interest c. Prices d. Employment
- Federal Reserve & Open Market Operations If the Fed shifts to a more restrictive monetary policy, and it utilizes the open market operations tool, describe what will happen to each of the following: 4. the exchange rate value of the dollar-Suppose the Federal Reserve wants to fix the U.S. exchange rate with the yen at $0.008 per yen. If the equilibrium market exchange rate were significantly lower at $0.007 per yen, what would the Fed need to do to maintain the fixed rate of $0.008 per yen? What would be the effect of these actions on the money supply in the U.S.? Explain.If the Fed started printing large quantities ofU.S. dollars, what would happen to the numberof Japanese yen a dollar could buy? Why
- Using a flow chart, illustrate the effects of contracting the money supply in a country with floating exchange ratesGive typing answer with explanation and conclusion Consider country A, which uses a fixed exchange rate system pegging its currency value against the US dollars and has perfect capital mobility. In the short run, if the U.S. central bank, the Federal Reserve Board of the U.S., lowers the money supply of the U.S., then Select one: a. The Reserve Bank of Country A would have to lower its money supply. b. The Reserve Bank of Country A would have to raise its money?Can you think of any major disadvantages to dollarization? How would a central bank work in a country that has dollarized?
- The U.S. economy is faltering, so the value of its associated currency, the dollar, is likely toWhy is it that in a pure, flexible exchange rate system,the foreign exchange market has no direct effect onthe money supply? Does this mean that the foreignexchange market has no effect on monetary policy?If the Fed lowers the federal funds rate so that the exchange rate falls, then imports ________ and exports ________. a. increase; increase b. increase; decrease c. decrease; increase d. decrease; decrease
