Consider a country that has an official settlements balance surplus and is experiencing upward pressure on the exchange-rate value of its currency. Which of the following will NOT be true in this context?
A. For the regular bank that is involved in the intervention transaction, the central bank decreases the bank's deposits at the central bank.
B. The central bank of this country must intervene to buy foreign currency and sell domestic currency.
C. Its balance sheet will show an increase in official international reserve holdings.
D. Its balance sheet will show an increase in its liabilities.
Answer: A
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Suppose India and France have the same PPF, shown in the figure above. Based on their current production points, India's most likely future PPF is ________ and France's most likely future PPF is ________
A) PPF1; PPF1 B) PPF2; PPF2 C) PPF0; PPF0 D) PPF2; PPF1 E) PPF1; PPF2
International exchange in which countries both import and export the same good is called:
A) one-way trade. B) strategic trade. C) two-way trade. D) multilateral trade.