If a Country Wants to Keep the Value of Its

question 17

Multiple Choice

If a country wants to keep the value of its currency fixed, then its central bank should

• A) sell domestic goods when there is an increase in the supply of its domestic currency.
• B) buy domestic goods when there is an increase in the supply of its domestic currency.
• C) sell its domestic currency when there is an increase in the supply of that currency.
• D) buy its domestic currency when there is an increase in the supply of that currency.