Why May a Central Bank Intervene in the Foreign Exchange

question 56

Multiple Choice

Why may a central bank intervene in the foreign exchange market when its currency is depreciating?

• A) concerns about the country's exports becoming less competitive
• B) concerns about inflation
• C) concerns about deflation
• D) to sterilize the effects on the domestic economy

---

Definitions:

Primary Prevention

Interventions aimed at preventing the onset of diseases or injuries before they occur.

Concealed Suicidal Message

Indirect or hidden signs expressed by individuals contemplating suicide, often overlooked by others.

Bankrupt

A legal status of a person or entity that cannot repay the debts it owes to creditors.

Suicidal Ideation

The consideration or contemplation of ending one’s own life.