QUESTION 4 The term that defines a situtiona in which a government must constrain its fiscal choices due to central bank policy is called: Bond market vigilantism Risk premiums O Monetary dominance Fiscal dominance QUESTION 5 To combat a fall in money demand and maintain a currency peg. a central bank must: Buy domestic bonds Buy reserve currency O Sell domestic bonds Sell reserve currency QUESTION 6 To combat a rise in money demand and maintain a given currency peg. a central bank must: O Buy reserves Increase domestic credit Sell reserves Decrease domestic credit