Hi, do you have the answers for the course International Financial Markets? This is my homework: Thanks!

1) Which of the following statements is true about sovereign funds?

A) They are usually held in assets denominated in foreign currencies.

B) They are nearly three times the size of the U.S. national income.

C) They are larger than the total assets held by China, Korea, Russia, and Singapore.

D) They have been diminishing in size over the last decades.

2) The sum of currency and bank reserves held by the central bank is one way of calculating

A) the money multiplier.

B) the monetary base.

C) the domestic portfolio.

D) domestic credit.

3) If the government issues new bonds, then domestic credit would

A) remain unaffected.

B) increase.

C) decrease.

D) become greater than the money stock.

4) A nation's FER ________

A) stands for foreign exchange reserves.

B) is valued in terms of domestic currency.

C) can used to intervene in currency markets.

D) all of the above

5) The monetary base can be calculated as:

A) DC + FER + C + TR.

B) DC + TR.

C) C + FER.

D) DC + FER.

6) If domestic credit were $12 million and foreign exchange reserves were $26 million and the reserve requirement were 10%, what is the value of the money stock?

A) $38.1 million$

B) 380 million

C) $140 million

D) $14 million

7) The money multiplier is

A) equal to total reserves divided by total deposits.

B) the relationship between bonds and money.

C) the way to calculate the impact of open market operations on foreign exchange reserves.

D) simply one over the required reserve percentage.

8) If the money stock is $900 million and the reserve requirement is 20%, what is the monetary base?

A) 4,500 million

B) $ $180 million

C) $720 million

D) The monetary base cannot be determined with the information given.

9) Suppose that the Federal Reserve issued bonds in the amount of $45 million and the reserve requirement was 10%, what would be the resulting change to the monetary base?

A) $45 million

B) $450 million

C) $4.5 million

D) The bond issuance would not impact the monetary base only the money stock.

10) Suppose that the Federal Reserve issued bonds in the amount of $45 million and the reserve requirement was 10%, what would be the resulting change to the money stock?

A) $45 million

B) $450 million

C) $4.5 million

D) The bond issuance would not impact the money stock only the monetary base.

11) When a central bank intervenes in the ________, their intention is to ________.

A) swap markets, convey a clear signal to the markets

B) futures market, hide its actions from the markets

C) forward market, hide its actions from the markets

D) spot market; convey a clear signal to the markets

12) If a central bank is said to be leaning against the wind, they have signaled that they will

A) intervene to reverse the current trend of their currency.

B) intervene to accelerate the current trend of their currency.

C) not intervene in the currency markets at all.

D) work together with their opposition even if it is politically difficult.

13) If the money multiplier is 5 and the Federal Reserve issues bonds in the amount of $6 million, what is the final change to the money stock?

A) $30 million

B) -$30 million

C) $1.2 million

D) - $1.2 million

14) If an economy has a fixed exchange rate and it chooses to issue $10 million in bonds, what will happen according to the Monetary approach?

A) It will have to increase its foreign exchange reserves.

B) It will have to decrease its foreign exchange reserves.

C) It will have to allow its currency to appreciate.

D) It will have to allow its currency to depreciate.

15) If an economy has a flexible exchange rate and it chooses to issue $10 million in bonds, what will happen according to the Monetary approach?

A) It will have to decrease its foreign exchange reserves.

B) It will have to allow its currency to depreciate.

C) It will have to allow its currency to appreciate.

D) It will have to increase its foreign exchange reserves.

16) In the two-country model of the Monetary Approach, the spot exchange rate is determined by

A) the ratio of prices in the economies.

B) the real money stock in country A vs. country B.

C) the nominal incomes in the two countries.

D) the relative quantities of money supplied and demanded.

17) In the United States, the primary agency responsible for foreign exchange intervention is

A) the U.S. treasury.

B) the Federal Reserve.

C) the exchange stabilization fund.

D) the IMF.

18) The Cambridge equation equates money demand as

A) a percentage of real GDP.

B) a fraction of nominal GDP.

C) a fraction of money supply.

D) a ratio of spot exchange rates.

19) Portfolio approach is considered an extension of the monetary approach because it

A) allows the central bank to use more than just bonds to maintain the exchange rate.

B) includes the ability to accumulate foreign assets beyond currencies.

C) includes the international impacts from one country onto another.

D) relates the domestic money stock to the foreign money stock.

20) One danger of sterilizing foreign exchange interventions is that changing the combinations of assets on a Central bank's balance sheet may influence the prices of the assets they hold. This is known as

A) the portfolio balance effect.

B) the announcement effect.

C) the signaling effect.

D) the locomotive effect.

21) The signaling effect is when an intervention provides

A) an unfair advantage to domestic industry.

B) markets with excessive liquidity.

C) traders with new information that alters their actions.

D) the incorrect message of the long policies of the monetary authority.

22) The announcement effect seems to show that

A) exchange rates do not change with the announcements at all

B) announcements of interventions are less important the interventions.

C) traders are not affected by central bank actions.

D). announcements of interventions are more powerful than interventions themselves.

23) The domestic currency will ________ with a(n) ________ in the foreign interest rate.

A) depreciate; decrease

B) appreciate; increase

C) depreciate; increase

D) appreciate; decrease

Answer:c

24) According to the Monetary approach, if the currency appreciates, the central bank could sterilize by

A) decreasing FER or DC.

B) decreasing FER, but not DC.

C) increasing DC, but not FER.

D) increasing FER or DC.

25) Open-market transactions conduct by a central bank

A) are subject to the same money multiplier effect that other banks face.

B) have a more powerful multiplier effect than other banks.

C) are not subject to a money multiplier effect.

D) cannot have their effect sterilized within the money stock.