1. Suppose the central bank of country X has $1000 million in foreign assets, $1400 million...

 

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1. Suppose the central bank of country X has $1000 million in foreign assets, $1400 million in domestic assets, and holds $1600 million in deposits by private banks. (1)How much currency in circulation is there in country X(in millions)? (2)Determine the central bank's balance sheet.(your answer should follow the format DA=XXX,FA=XXX,MC=XXX,BD=XXX where XXX is a number,and DA stands for domestic assets? (3)Suppose the Central bank engages in a sterilized selling of foreign assets in the accounts of $200 million by purchasing domestic assets. Determine the new balance sheet. (Your answer should follow the format DA=XXX,MC=XXX,BD-XXX Where XXX is a number, and DA stands for domestic assets, FA stands for foreign assets,C stands for currency in circulation and BD stands for bank deposits.) 1. Suppose the central bank of country X has $1000 million in foreign assets, $1400 million in domestic assets, and holds $1600 million in deposits by private banks. (1)How much currency in circulation is there in country X(in millions)? (2)Determine the central bank's balance sheet.(your answer should follow the format DA=XXX,FA=XXX,MC=XXX,BD=XXX where XXX is a number,and DA stands for domestic assets? (3)Suppose the Central bank engages in a sterilized selling of foreign assets in the accounts of $200 million by purchasing domestic assets. Determine the new balance sheet. (Your answer should follow the format DA=XXX,MC=XXX,BD-XXX Where XXX is a number, and DA stands for domestic assets, FA stands for foreign assets,C stands for currency in circulation and BD stands for bank deposits.)

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1 To determine the amount of currency in circulation in country X we need to subtract the deposits b... View the full answer