If a Central Bank Was to Prevent Its Currency from Depreciating

question 104

Multiple Choice

If a central bank was to prevent its currency from depreciating, it would likely adopt a (an) ______ monetary policy to ______ the domestic interest rate, thus strengthening its currency.

• A) contractionary, decrease
• B) contractionary, increase
• C) expansionary, decrease
• D) expansionary, increase

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Definitions:

Sample Information

Data collected from a subset of a larger population, used to make inferences about the population.

T-Distribution

A type of probability distribution that is symmetric and bell-shaped, but with heavier tails than a normal distribution, used especially in statistics for small sample sizes.

Normally Distributed

Refers to a type of probability distribution that is evenly balanced around the mean, indicating that values close to the mean occur more often than values further from the mean.

Population

The entire group of individuals or instances about whom the data is collected and which the statistical analysis is based upon.