ch. 18 Flashcards
(14 cards)
What are examples of countries stabilizing Exchange rates?
What normally moves E?How does CB stabilize E?
explain the example of switzerland
WHat are the accounts of CB? how does it change Ms / interest rates?
How does the CB counter excess/lack of demand for foreign currency? Sterilized and unsterilized intervention
What is the effect of monetary policy with fixed rates? why does it not work?
What changes in fiscal policy instead short run? why is it more effective?
What changes in fiscal policy in the long run? what is the change in q due to ?
How can a CB change the fixed exchange rate? What are the adjustments in the long run?
What do we mean by capital flight?
What are in general the risks of fixed exchane? Devaluation- reserves decline; CA
What can change expectations? why are they important?
What are the main arguments in favor of floating exchange rates?
What do we mean by managed floating?
