To Prevent the Dollar from Depreciating, the U

question 272

Multiple Choice

To prevent the dollar from depreciating, the U.S. central bank that tries to fix the currency value of the dollar can

• A) buy U.S. dollars in the foreign exchange market.
• B) sell U.S. dollars in the foreign exchange market.
• C) abandon the U.S. dollar and use another country's currency as its legal currency.
• D) buy foreign currencies in the foreign exchange market.

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Definitions:

Vintner

is a person engaged in winemaking, especially one who is responsible for the production of wine at a vineyard or winery.

Opportunity Cost

The expense incurred by not selecting the second-best choice during a decision-making process or when evaluating different alternatives.

Full Employment

A situation in an economy where all available labor resources are being used in the most efficient way possible.

Marginal Rate

Often refers to the marginal rate of substitution or marginal rate of transformation in economics, indicating the rate at which one good can be substituted for another.