For each of the following monetary policy tools: A. The BSP buys securities in the open market. B. The BSP sells foreign exchange current C. The BSP increases the reserve requirement ratio. D. The BSP applies its moral suasion ability requesting commercial banks to lower down interest rates. E. The government decided to deposit funds at the BSP. 1. Determine whether the monetary tool imposed by the BSP is an expansionary or a contractionary policy.

Q: _1). is a market for The foreign exchange market converting the currency of one country into that of…

A: “Since you have posted a question with multiple subparts, we will solve first three subparts for…

Q: In the United States economy, the interest rate is: a. the equilibrium cost of borrowing capital. b.…

A: Interest rate is the cost of borrowing capital which is expressed in percentage terms. The Federal…

Q: Which of the following is NOT a function of the International Monetary Fund? a. Serve as lender of…

A: Lender of last resort means that if an eligible organization any difficulty in raising loan and the…

Q: vny does the Fed use the RRF rate as a supplem the interest on reserve balances rate? Because…

A: Federal bank maintain money supply by the increase or decrease the RRP ON Reverse repo rate and IORB…

Q: Which of the following statements is true? Select one: a. The Basel Accord imposes maximum asset…

A: Banking system is the main part of any country’s financial system. It regulates the flow of money.…

Q: The Reserve Bank of Australia uses open market operations to manage monetary conditions. These…

A: Open market operations play a crucial role in the management of monetary conditions by central…

Q: 5 Consider the following information: Probability of Rate of Return if State Occurs Economy…

A: The expected return is the amount of return expected from the investment. Standard deviation is a…

Q: (a) The Federal Reserve pursues an expansionary monetary policy. (b) Assume federal outlays exceed…

A: (a) The Federal Reserve will not crowd out private investment by pursuing an expansionary monetary…

Q: All else being equal, if a central bank buys government bonds from the market it would: a. mean…

A: In finance central bank buying government bonds from the market is known as open market operations.

Q: Suppose that the Reserve Bank "tightens" monetary policy. In what order do events occur when this…

A: Monetary policy is tool is reserve bank which he used to control the supply of money in the market…

Q: Briefly discuss the performance and criticism of the following International financial institutions:…

A: A financial institution is a business that engages in a range of monetary operations such as cash…

Q: Identify under which one of the following market the issue of treasury bills lies: a. Foreign…

A: Foreign Currency Market- It is an over-the counter marketplace where participants buy, sell,…

Q: Which of the following is NOT usually associated with “financial risk”? a. A rise in the country’s…

A: Financial risk is the possibility of capital loss as a result of shifting market conditions.…

Q: 1. describe and explain how the monetary system much of the trading world knew in 1800 evolved into…

A: Monetary system is a system formed by the government to provide and circulate money in the economy.…

Q: Describe tools that the US Treasury and the Federal Reserve use to undertake restrictive monetary…

A: Following are the tools that the US Treasury and the Federal Reserve use to undertake restrictive…

Q: refinancing rate

A: The refinancing rate refers to the interest rate which is required to be paid by the banks when they…

Q: The Federal Reserve increasing interest rates in the hope that the dollar appreciates is an example…

A: The objective of the question is to determine whether the action of the Federal Reserve increasing…

Q: Unlike other investors, you believe the Fed is going to loosen monetary policy. What would be your…

A: Look if I feel that FED is going to loosen monetary policy then it means FED going to cut rate and…

Q: How has deregulation of the financial services industry affected the makeup of financial…

A: “Hey, since there are multiple questions posted, we will answer first question. If you want any…

Q: Analyze and explain the current state of the international monetary system. Then, discuss the…

A: The international monetary system refers to the framework and rules that govern currency exchange…

Q: Which of the following is NOT one of the Fed's monetary policy tools? A. The required reserve ratio.…

A: Several options have been listed as Fed's monetary policy tools. We have to find the one that's not…

Q: The following are the monetary policy tools EXCEPT:*         A. buying and selling of short-term…

A: Monetary policies are operated by the Central bank of the country which regulates the banking system…

Q: Central Banks, such as the Reserve Bank of Australia (RBA), typically employ contractionary monetary…

A: Central banks carry out different monetary policies to decrease inflation and increase interest rate…

Q: To strengthen the dollar using sterilized intervention, the Fed would ____ dollars and…

A: Sterilized intervention is the purchase or sale of foreign currency by a central bank in order to…

Q: Is it necessary for the Federal Reserve to communicate the strategy and objectives of its monetary…

A: Financial Markets  The phrase "financial markets" is frequently used only to refer to the markets…

Q: If the national debt increases, is it true that we need not worry about the debt as long as the…

A: National debt is the amount of money owed by the government. The government takes national debt in…

Q: Please step by step solutions and final answer is short answer mi

A: No, Belgium cannot directly influence the exchange rate between the Euro and the U.S. dollar through…

Q: A foreign exchange intervention with an offsetting open market operation (e.g. a purchase of US…

A: Foreign Exchange intervention - It is a kind of monetary policy tool where the central bank actively…

Q: When any central bank wanted to increase the money supply and loosen credit conditions, what would…

A: In order to increase the money supply and loosen credit conditions, the central bank would purchase…

Q: what is the impact on the Loanable Funds Market

A: Loan-able funds are the amount or the funds available in the loan market for the borrowers. These…

Q: 13.) What are derivative securities? Why do they exist? 14.) 2020 was year the COVID-19 global…

A: Since you have asked multiple questions, we will solve the first question for you, if you want any…

Q: part-a: What is the difference between direct finance and indirect finance?  part-b: What are the…

A: Since you have posted a question with multiple subparts, we will solve first three sub parts for…

Q: What are two monetary policies that could be implemented by the central bank which would have the…

A: Federal bank achieve of economic growth by monetary policy by increasing or decreasing money supply.

Q: Which of the following statements is true of export financing? Governments may promote exports by…

A: Export companies are exporting the product to outside the country that manufactured in the domestic…

Q: What should be the role of the Finance Ministry to control inward foreign remittances?

A: Inward remittance is referred to as the received funds through an individual in an account from the…

Q: Why would government usually default first to monetary policy for stabilization before using fiscal…

A: Monetary policy - It is concerned with the monetary system of a country. Monetary policy is the…

Q: What has been the role of IMF loans in international affairs addresing financial crisis? Why are…

A: International Monetary Fund or IMF is defined as an organization, which includes 190 countries as a…

Q: Which of the following statements is (are) NOT directly related to moral hazard? 1. The use of loan…

A: Moral hazard is referred as the situation, where one party used to get involved in the risky event,…

Exchange Rate Risk

It is the possibility that the value of a currency will fluctuate in the future. In the wake of globalization, business establishments have increasingly ventured into international markets. The volume of international trade has prospered excellently in the near past and is expected to be more affluent in the future. The use of exchange-traded derivative financial instruments has been multi-folded to provide for the requirements of various MNCs and offshore potential investors. Most banks and financial institutions have helped integrate the global economies. Our Government has introduced some bold and extreme measures to fulfil the purpose behind the fiscal, industrial, and monetary policies. The enactment of GST is a huge step towards streamlining the taxation system of the country. Owing to Covid-19, this aspect of corporate risk management has become critical.