One Lesson Policymakers Have Learned, and Which Was Evident from Japan's

question 17

Multiple Choice

One lesson policymakers have learned, and which was evident from Japan's experience in 2002, is:

• A) an intervention in the foreign exchange market will not work unless accompanied by a change in the policy interest rate.
• B) an intervention in the foreign exchange market is almost always effective if done on a regular basis.
• C) in order for foreign exchange interventions to work, they must be frequent and expected.
• D) for an intervention in the foreign exchange market to work, the interest rate must be held constant by the central bank.

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Definitions:

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Establishment Clause

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