Suppose we were analyzing the pound per Swiss franc foreign exchange market. If Switzerland's central bank intervenes to raise the value of the Swiss franc, then:
a. The supply of Swiss francs in the foreign exchange market rises, and England's monetary base rises.
b. The supply of Swiss francs in the foreign exchange market rises, and England's monetary base falls.
c. The demand for Swiss francs in the foreign exchange market rises, and England's monetary base rises.
d. The demand for Swiss francs in the foreign exchange market rises, and England's monetary base remains unchanged.
e. The demand for Swiss francs in the foreign exchange market rises, and England's monetary base falls.
Question 2 - Suppose we were analyzing the Turkish lira per euro foreign exchange market. If Turkey's central bank intervenes to reduce the value of the euro, then:
a. The supply of euros in the foreign exchange market rises, and Turkey's monetary base rises.
b. The supply of euros in the foreign exchange market rises, and Turkey's monetary base falls.
c. The demand for euros in the foreign exchange market rises, and Turkey's monetary base rises.
d. The demand for euros in the foreign exchange market rises, and Turkey's monetary base falls.
e. The demand for euros in the foreign exchange market rises, and Turkey's monetary base remains unchanged.
Question 3 - Suppose we were analyzing the Turkish lira per euro foreign exchange market. If The Euro-Area's central bank intervenes to reduce the value of the euro, then:
a. The supply of euros in the foreign exchange market rises, and the euro-Area's monetary base rises.
b. The supply of euros in the foreign exchange market rises, and the euro-Area's monetary base falls.
c. The demand for euros in the foreign exchange market rises, and the euro-Area's monetary base rises.
d. The demand for euros in the foreign exchange market rises, and the euro-Area's monetary base falls.
e. The demand for euros in the foreign exchange market rises, and the euro-Area's monetary base remains unchanged.
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