1. Fill in the following table. If the factors in the first column change as indicated, in which direction will the variables in the remaining columns change (i.e., rise (+), fall (-), stay the same (0))? Consider only the immediate and direct effects of these changes. (No need to give explanations here)

Impact	Monetary Base	Total Reserves	Excess Reserves
Central bank increases its discount rate, and, as a result, decreases its lending to commercial banks
Government increases taxes
Central bank sells foreign currencies in the foreign exchange market to increase the value of its own currency
Central bank increases the required reserve ratio

1. Suppose that Sweden, which operates under a flexible exchange rate system, experienced a sudden inflow of foreign capital investment. Further suppose that, until then, Sweden's Current (C.A), Financial (F.A), and Reserves and Related Items (RRI) Account balances were equal to 0. Assuming that NEO and KA account balances always equal 0, then, as a result of this inflow, Sweden's (circle one, no explanation required)

• F.A. would show a_________ (surplus (+), deficit (-), no change (0), undetermined (?))
• C.A. would show a__________ (surplus (+), deficit (-), no change (0), undetermined (?))
• R.R.I. Account would show a____ (surplus (+), deficit (-), no change (0),undetermined (?))

1. If the Brazil's central bank intervenes in the foreign exchange market to keep the Real(BRL) from falling against the USD, then, as a result, Brazil's monetary base will ________ (rise, fall, stay the same, cannot determine - choose one), the level of the Brazilian central bank's international reserves will ______________ (rise, fall, stay the same, cannot determine - choose one), and Brazil's real interest rate will ___________ (rise, fall, stay the same, cannot determine - choose one).