Use the Following to Answer Questions

question 210

Multiple Choice

Use the following to answer questions:
-(Figure: Exchange Market Intervention) Refer to panel (b) in Figure: Exchange Market Intervention. Which approach could the Genovian government use to decrease the value of the geno below its present equilibrium exchange rate and into the target range?

• A) use its own currency to buy U.S. dollars
• B) shift the demand for genos to the right by increasing interest rates in Genovia
• C) eliminate exchange controls that limit the right of Genovian citizens to sell foreign currency
• D) tighten the exchange controls that limit purchases of U.S. dollars by Genovian citizens

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