Which of the Following Is NOT a Motivation for a Government

question 58

Multiple Choice

Which of the following is NOT a motivation for a government or central bank to manipulate domestic currency valuation?

• A) fight inflation
• B) slow too rapid economic growth
• C) spur too slow economic growth
• D) All of the above are motivations for the government or central bank to manipulate currency values.

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Definitions:

Exchange Rate

The price of one country's currency expressed in another country's currency.

Interest Rates

The proportion of a loan that is charged as interest to the borrower, typically expressed as an annual percentage of the loan outstanding.

Foreign Bond

A bond issued in a domestic market by a foreign entity, in the domestic market's currency.