This topic contains a solution. Click here to go to the answer
« previous next »

Author Question: Does the signalling effect of foreign exchange intervention support or refute the claim that assets ... (Read 54 times)

formula1

  • Hero Member
  • *****
  • Posts: 666
on: Jun 30, 2018
Does the signalling effect of foreign exchange intervention support or refute the claim that assets cannot be perfect substitutes if sterilized intervention is going to have any effect? Please explain.
 
  What will be an ideal response?

Question 2

Which one of the following statements is MOST accurate?
 
  A) In general, consumption demand rises by less than disposable income.
  B) In general, consumption demand rises by more than disposable income.
  C) In general, consumption demand rises by more than income.
  D) In general, consumption demand rises by the same amount as disposable income rises.
  E) In general, consumption demand rises are unrelated to disposable income rises.


Related Topics

Need homework help now?

Ask unlimited questions for free

Ask a Question
Marked as best answer by a Subject Expert

debra928

  • Sr. Member
  • ****
  • Posts: 342
Reply #1 on: Jun 30, 2018
Answer to Question 1

The signalling effect refutes the claim. Even with the assumption of perfect asset substitutability, if the market is unsure of the future direction of policy, then sterilized intervention can fix a market's expectations about the exchange rate in the future. From post discussion, a change in the expected exchange rate will lead to a change in the exchange rate today.

Answer to Question 2

A


formula1

  • Member
  • Posts: 666
Reply 2 on: Jun 30, 2018
Excellent

cpetit11

  • Member
  • Posts: 321
Reply 3 on: Yesterday
Great answer, keep it coming :)

« previous next »
 

Did you know?

Alcohol acts as a diuretic. Eight ounces of water is needed to metabolize just 1 ounce of alcohol.

Did you know?

During the twentieth century, a variant of the metric system was used in Russia and France in which the base unit of mass was the tonne. Instead of kilograms, this system used millitonnes (mt).

Did you know?

Drugs are in development that may cure asthma and hay fever once and for all. They target leukotrienes, which are known to cause tightening of the air passages in the lungs and increase mucus productions in nasal passages.

Did you know?

More than 2,500 barbiturates have been synthesized. At the height of their popularity, about 50 were marketed for human use.

Did you know?

The word drug comes from the Dutch word droog (meaning "dry"). For centuries, most drugs came from dried plants, hence the name.

The Serial Position Effect The Serial Position Effect
Instructions for Completing the CMS-1500 (02/12) Claim Form Continued Instructions for Completing the CMS-1500 (02/12) Claim Form Continued
Instructions for Completing the CMS-1500 (02/12) Claim Form Continued Instructions for Completing the CMS-1500 (02/12) Claim Form Continued
For Gulf War veterans, lack of social support in the field is related to postwar depression. The ... For Gulf War veterans, lack of social support in the field is related to postwar depression. The ...
Roberts's Assessment, Crisis Intervention, and Trauma Treatment (ACT) model. Roberts's Assessment, Crisis Intervention, and Trauma Treatment (ACT) model.
Doppler Effect, Observer Moving Doppler Effect, Observer Moving
Video: Red alga life cycle Animation

For a complete list of videos, visit our video library