What is the difference between a sterilized and non-sterilized central bank intervention in the foreign exchange market?

Q: Regional differences that make implementing monetary policy difficult are present in the Eurozone…

A: Monetary policy refers to the one that is implemented by the central bank to make changes in the…

Q: The IMF monitors the international monetary system and global economic developments to identify…

A: The purpose of the organisation is to ensure worldwide monetary cooperation. It stables the currency…

Q: Give an example in the recent past when the Central Bank intervene in the foreign exchange market in…

A: Answer: Foreign exchange intervention is one of the main functions of any central bank, in this…

Q: rency board or dollarization? Select one: a. Loss of independent monetary policy and flexibility in…

A:

Q: Using the Mundell-Fleming model, explain whether you think a country should pursue an expansionary…

A: The fixed exchange rate system is when the central bank interferes and buys or sells the foreign…

Q: How can an unexpected fall in exchange rates injure the financial health of a nation’s banks?

A: Exchange rate determines the price of the currency of a domestic country when it is exchanged with…

Q: Explicate the central banks role in the administration of exchange control?

A: The central bank of the country is the apex bank of the country which regulates all commercial banks…

Q: What is it that determines the relationship between spot and forward foreign exchange rates?

A: The spot exchange rate is the rate at which transactions happen currently. The forward exchange rate…

Q: discuss the qualities if an efficient international monetary system that US should work towards

A: IMS is a set of international agreed rules and the institutions that facilitates for the…

Q: If the Fed raises the federal funds rate so that the exchange rate rises, then imports ________ and…

A: The value of a currency relative to the currency of associate other country or economic zone is…

Q: According to the Impossible Trinity, if a country decides to make its currency freely floating, what…

A: The Impossible trinity is an economic theory, which suggests that countries can choose from three…

Q: If the Fed lowers the federal funds rate so that the exchange rate falls, then imports ________ and…

A: The fall in the exchange rate implies the fall in the value of currency or depreciation of currency…

Q: Why is the exchange rate overshooting an important phenomenon? What does it help to explain?

A: With given prices a monetary expansion under flexible rates and perfect capital mobility leads to…

Q: A country is always worse off when its currency isweak (falls in value).” Is this statement true,…

A: This statement is false. A weak currency has a negative effect on purchase of goods and services…

Q: Suppose that a country with pegged exchange rate has reserves of $8 billion and is running a deficit…

A: Given Foreign exchange reserves = 8 Billion $ Current account deficit = 1 Billion per month…

Q: Critically evaluate the importance of the Marshall- Learner condition in the stability of the…

A: The foreign exchange market is the over-the-counter market that determines the exchange rate of…

Q: Please discuss the implications of RMB internationalization on the future of the international…

A: In the international market, the value of a currency depends upon specific currencies that are used…

Q: When a country operates with a currency board, the central bank's sole objective is to maintain the…

A: When a country operates with a currency board, the central bank's sole objective is to maintain the…

Q: What were the implications of the 1998 Russian Financial Crisis on the exchange rate and currency…

A: The Foreign Exchange Rate is the rate at which one currency is exchanged for another. The foreign…

Q: Consider the case of a fixed exchange rate system as held in Europe before the Euro. All countries…

A: When the country fixes its exchange rate with foreign economy like Germany, then the domestic…

Q: if a country pegs its currency value to the euro and the exchange rate peg is low relative to…

A: A speculative attack is the sudden sale of untrustworthy assets by previously passive speculators,…

Q: Explain to the citizens of your country the situations that surround the balance of payment in an…

A: When an economy open ups their boundaries to make trade transactions with other economies, it will…

Q: Exchange Rate Volatility?

A: (Q) Exchange Rate Volatility?

Q: Use the Mundell-Fleming model to explain the effect of restrictive monetary policy with floating…

A: Mundell-Fleming model explains the effect of policies that can be both fiscal and monetary in nature…

Q: What would be a major disadvantage to dollarization? How would a central bank work in a country that…

A: Dollarization is the phenomenon where a country uses the currency of another country in addition to…

Q: What techniques can a central bank use to stabilize the exchange value of its currency?

A: Monetary policy refers to actions pursued by the central bank of an economy to maximize the…

Q: How does a country’s decision to fix its exchange rate to that of another nationshape the conduct of…

A: The fixed exchange rate/pegged exchange rate is the regime in which the worth of the exchange rate…

Q: Compare and discuss the effectiveness of monetary policy BOTH under Floating Exchange Rate System…

A: Monetary policy under floating exchange rate: Expansion of monetary policy is quite effective. When…

Q: Monetary policy under ... exchange rate system will always be .... and it will always ... income…

A: A monetary policy (change in MS) has no effect on GNP or the exchange rate in a fixed exchange…

Q: Since 2009 the IMF's exchange rate regime classification system uses a "de facto classification"…

A: Answer: Floating arrangements

Q: In your own words, what is the importance/benefit of our membership to International Monetary Fund

A: The 190 member countries govern and hold the IMF accountable. The founding and mission of the…