Suppose a central bank tries to keep exchange rates fixed. When there is an increase in the demand for foreign goods, the central bank will most likely
A) buy foreign currency in exchange for the domestic currency.
B) do nothing.
C) sell the domestic currency in exchange for foreign reserves.
D) use foreign reserves to buy the domestic currency.
D
Economics
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The value of Russia's petroleum exports rises predictably when it is cold in Europe and declines during the warmer months. Is the spot exchange rate (euro/RUB) likely to match this pattern?
What will be an ideal response?
Economics
Which of the following was a source of the U.S. federal government's financial revenue for World War II (1941–45)?
(a) Tariffs (b) Bond sales to other governments (c) Bond sales to the Federal Reserve System (d) Bond sales to the U.S. Congress
Economics