Suppose the government imposes a new tax on ATM transactions. How will the demand for M1 change? Demand for M1 rises Demand for M1 falls Demand for M1 does not change If the positive interest rate differential in favour of a foreign monetary centre is 2 percent per year and the foreign currency is at a forward premium of 2 percent per year, roughly how much would an interest arbitrageur earn from the purchase of foreign three-month treasury bills if he or she covered the foreign exchange risk? 4 percent per annum 0 percent per annum Fixed exchange rate with band where the band of fluctuation is infinity is equivalent to the flexible exchange rate system True or false