QUESTION 20 Persistent _____ shocks to domestic AD expose a central bank attempting to fix their exchange rate to a potential currency crisis. positive negative QUESTION 21 To better model the real world, the addition of the risk premium to the interest parity condition reflects the fact that government bonds issued are _ - across different countries." perfect substitutes not perfect substitutes QUESTION 22 "Under a strict Gold Standard, persistent growing trade deficits are possible." True False QUESTION 23 "To sterilize a positive AD shock at home, a central would perform _____ to return to their peg. open market purchases open market sales expansionary fiscal policy contractionary fiscal policy QUESTION 24 A central bank specifically depreciating the value of their currency peg is refered to as a devaluation. True 0 False QUESTION 25 "In response to a tax increase, a central bank would need to perform ...._ which will cause domestic income to open market purchases : increase by a greater magnitude open market purchases : decrease by a greater magnitude open market sales : increase by a greater magnitude open market sales : decrease by a greater magnitude