国际经济学第八版下册课后答案英文版17.docVIP

PAGE 86??Krugman/Obstfeld???International Economics: Theory and Policy, Eighth Edition Chapter 17?Fixed Exchange Rates and Foreign-Exchange Intervention?? PAGE 87 n?Answers to Textbook Problems 1. An expansion of the central bank’s domestic assets leads to an equal fall in its foreign assets, with no change in the bank’s liabilities (or the money supply). The effect on the balance-of-payments accounts is most easily understood by recalling how the fall in foreign reserves comes about. After the central bank buys domestic assets with money, there is initially an excess supply of money. The central bank must intervene in the foreign exchange market to hold the exchange rate fixed in the face of this excess supply: the bank sells foreign assets and buys money until the excess supply of money has been eliminated. Since private residents acquire the reserves the central bank loses, there is a non-central bank capital outflow (a financial-account debit) equal to the increase in foreign assets held by the private sector. The offsetting credit is the reduction in central bank holdings of foreign assets, an official financial inflow. 2. An increase in government spending raises income and also money demand. The central bank prevents the initial excess money demand from appreciating the domestic currency by purchasing foreign assets from the domestic public. Central bank foreign assets rise, as do the central bank’s liabilities and, with them, the money supply. The central bank’s additional reserve holdings show up as an official capital outflow, a capital-account debit. Offsetting this debit is the capital inflow (a credit) associated with the public’s equal reduction in its own foreign assets. 3. A one-time unexpected devaluation initially increases output; the output increase, in turn, raises money demand. The central bank must accommodate the higher money demand by buying foreign assets with domestic currency, a step that raises the central bank’s liabilities (an