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7. Flabovia's Central Bank (FCB) is facing pressure from its trading partners to depreciate its currency, the Flaboyant. The Bank has been intervening in the

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7. Flabovia's Central Bank (FCB) is facing pressure from its trading partners to depreciate its currency, the Flaboyant. The Bank has been intervening in the foreign exchange market by buying its currency continuously and thus exhausting its international reserves. The type of intervention utilized by the Flabovian authorities is referred to as: A. Free Float B. Neutral C. Reserve maintenance intervention D. Unofficial Pegging E. Checking the wind 8. According to the "Impossible Trinity," countries must select any two of the following three policy objectives (but not the third): A. Free Capital Mobility, Capital Controls and Fixed Exchange Rates B. Capital controls, Independent Monetary Policy and Free Capital Mobility C. Fixed Exchange Rates, Pegged Exchange Rates and Flexible Exchange Rates D. Free Capital Mobility, Independent Monetary Policy and Fixed Exchange Rates 9. According to most observers of the International Monetary System, the current exchange rate system associated with currencies of most of the major world economies can be characterized as: A) Selective Peg with a touch of Gold Standard B) Free Float C) Fixed Exchange Rate D) Managed Float E) Managed Fixed Rate 10. One of the primary objectives of the Bank for International Settlements (BIS) is to: A. Promote Exchange Rate Stability B. Serve as repository for the reserves of its members C. Strengthen the soundness of the international monetary sytem D. Help members secure Balance-of-Payments financing E. Issue SDRs

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