Substantial Intervention in Foreign Exchange Markets by a Central Bank

question 6

Multiple Choice

Substantial intervention in foreign exchange markets by a central bank in an attempt to maintain an exchange rate is called

• A)sterilization
• B)synchronization
• C)dirty floating
• D)managed neutralization
• E)open market operations

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Definitions:

Economic Efficiency

A condition in which a system is capable of producing maximum desired outputs from given inputs without wastage, reflecting optimal allocation of resources.

Information Flow

The movement of information within and between entities, which is crucial for decision making and operations.

Politically Authoritarian

A governance system marked by strong central power and limited political freedoms and personal rights.

Property Rights

Legal rights to possess, use, and dispose of assets including real, personal, and intellectual property.