Use the Following to Answer Questions

question 427

Multiple Choice

Use the following to answer questions :
Figure: Exchange Market Intervention
-(Figure: Exchange Market Intervention) Look at panel (b) in the figure Exchange Market Intervention. Which of the following approaches could the Genovian government use to decrease the value of the geno below its present equilibrium exchange rate and into the target range?

• A)use its own currency to buy U.S. dollars
• B)shift the demand for genos to the right by increasing interest rates in Genovia
• C)eliminate exchange controls that limit the right of Genovian citizens to sell foreign currency
• D)tighten the exchange controls that limit purchases of U.S. dollars by Genovian citizens

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