Question 1 (1 point) Which of the following is not part of the trilemma of inter
ID: 1219136 • Letter: Q
Question
Question 1 (1 point)
Which of the following is not part of the trilemma of international monetary regimes?
Question 1 options:
free trade
free capital flows
effective monetary policy
fixed exchange rate
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Question 2 (1 point)
People holding money in anticipation that bond yields will rise is an example of
Question 2 options:
money demand for transactions.
precautionary demand.
speculative demand.
none of the above.
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Question 3 (1 point)
People holding money in case they need to fix their car is an example of
Question 3 options:
money demand for transactions.
precautionary demand.
speculative demand.
none of the above.
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Question 4 (1 point)
Which of the following regimes allows for effective domestic monetary policy?
Question 4 options:
gold standard
free float
fixed exchange rate
none of the above
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Question 5 (1 point)
Dollarization is a type of what exchange rate regime?
Question 5 options:
dirty standard
free float
fixed exchange rate
none of the above
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Question 6 (1 point)
Which of the following is equivalent to velocity?
Question 6 options:
MV/PY
YP/M
MP/Y
none of the above
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Question 7 (1 point)
The major advantage of fixed exchange rates is that _____.
Question 7 options:
is allows for free capital mobility
it ensures exchange rate stability for importers and exporters
central banks can exercise monetary policy discretion
it increases the foreign exchange reserves with the central bank
free trade
free capital flows
effective monetary policy
fixed exchange rate
Explanation / Answer
Question 1
free trade
Free trade is not part of trilemma all other three are part of trilemma
Question 2
None of the above
Question 3
precautionary demand.
precautionary demand is nothing but people hold cash in their hand in anticipation of emergency
Question 4
free float
Effective monetary policy can take place much easily with flotating exchange rates. As you would no further need to think about exchange rates
Question 5
fixed exchange rate,
Dollarization is nothing but pegging your local currency to dollar
Question 7
it ensures exchange rate stability for importers and exporters
Fixed exchange rates can help a lot as your markets volatality will decrease.
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