Please define and give an example of sterilized foreign exchange intervention
What will be an ideal response?
Sterilized foreign exchange intervention occurs when a central bank carries out equal foreign and domestic asset transactions in opposite directions to nullify the impact on the domestic money supply. An example is a central bank purchasing $100 of domestic assets but selling $100 of foreign bonds.
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On the long-run aggregate supply curve,
A) an increase in the price level increases the level of potential GDP. B) an increase in the price level has no effect on the aggregate quantity of GDP supplied. C) an increase in the price level reduces the aggregate quantity of GDP supplied. D) an increase in the price level increases the aggregate quantity of GDP supplied.
How does the idea of a leaky bucket relate to the study of income distribution?