Question
Suppose that Japan wishes to use sterilized market intervention to devalue the yen. Japan's central bank would ____ yen and simultaneously_____Japanese treasury securities: buy,buy sell,sell
Suppose that Japan wishes to use sterilized market intervention to devalue the yen. Japan's central bank would ____ yen and simultaneously_____Japanese treasury securities:
buy,buy
sell,sell
sell,buy
buy,sell
Can you please explain this question to me. I think the answer is Sell/Buy because ,bank increases the money supply into the market thus decreasing the currency value.Also by buying back the government securities there is an inflow of the money into the economy thus increasing the money supply and decreasing the currency value but I am not sure.
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started