Suppose a Central Bank Prevents a Depreciation of Its Currency

question 60

Multiple Choice

Suppose a central bank prevents a depreciation of its currency by intervening in the foreign exchange market and buying its currency with foreign currency.Other things equal, this also causes the

• A) domestic money supply to decrease and a decline in aggregate demand.
• B) domestic money supply to increase and a decline in aggregate demand.
• C) domestic money supply to decrease and a rise in aggregate demand.
• D) domestic money supply to increase and a rise in aggregate demand.

---

Definitions:

Cnidarians

A phylum of aquatic invertebrate animals that includes organisms such as jellyfish, corals, and sea anemones, characterized by their cnidocytes, specialized cells used for capturing prey.

Defensive Cells

Cells within the immune system that are involved in protecting the body against both infectious disease and foreign invaders.

Reproductive Cells

Cells specialized for sexual reproduction, capable of undergoing meiosis to produce gametes or fertilized to form a new organism.

Excretory Organs

Organs involved in the process of removing waste products and excess substances from an organism's body, such as kidneys in humans.