In Addition to Economic Variables,intervention of the Government in the FX

question 52

Multiple Choice

In addition to economic variables,intervention of the government in the FX market may affect the equilibrium exchange rate.Which of the following interventions does the Australian government continue to pursue?

• A) Increased tariff protection in the car industry and textile, clothing and footwear industries.
• B) Implementing tougher foreign investment guidelines, imposed by the Foreign Investment Review Board.
• C) Active participation in the FX market to maintain the AUD exchange rate within a target exchange rate band published in the Reserve Bank Bulletin.
• D) None of the given answers.

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Definitions:

Socially Optimum

A condition in economics where the allocation of resources maximizes the overall utility or welfare of society.

Socially Optimum

The ideal level of production or consumption from the perspective of society as a whole, where social welfare, including both costs and benefits, is maximized.

Public Park

A region designated for the enjoyment and recreation of people or for safeguarding wildlife and natural habitats, consisting of natural, semi-natural, or intentionally planted spaces.

Government Intervention

Actions taken by a government to influence or directly manage an economy or specific industry, often to correct market failures.