Why May a Central Bank Intervene in the Foreign Exchange

question 20

Multiple Choice

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

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

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Definitions:

Illegal

Activities or actions that are forbidden by law or statute, leading to penalties if violated.

Logistics

The detailed organization and implementation of a complex operation, often related to the transportation and storage of goods.

Marketing Channel

A systems of intermediaries that helps to deliver a product from the producer to the consumer.

Logistics

The comprehensive coordination of complex operations involved in the movement, storage, and processing of goods and materials from origin to consumption.