If the Goal Were to Decrease the Value of a Country's

question 41

Multiple Choice

If the goal were to decrease the value of a country's currency - to fight an appreciation of the domestic currency in exchange for foreign currency - the central bank would:

• A) buy its own currency in exchange for foreign currency.
• B) follow a restrictive monetary policy.
• C) drive real rates of interest up.
• D) sell its own currency in exchange for foreign currency.

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Definitions:

Dressmaking Company

A business specializing in creating custom clothing and alterations.

Service Business

A business that provides intangible products or services to customers, rather than physical goods.

Law Firm

A business entity formed by one or more lawyers to engage in the practice of law.

Service Business

A service business is a type of business that provides intangible products or services to customers, as opposed to selling physical goods.