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

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Definitions:

Protein

Large molecules made up of amino acids that perform a variety of functions in the body, including structural support, enzyme catalysis, and transportation.

Fast-twitch Muscle Fibers

Muscle cells specialized for rapid contraction and are primarily engaged during high-intensity, short-duration activities like sprinting.

ATP

The molecule adenosine triphosphate, ATP, facilitates intracellular energy transportation necessary for metabolism.

Myoglobin

A crimson-colored protein, which includes heme, responsible for transporting and holding oxygen within muscle cells, and closely resembles the structure of hemoglobin.