A government's policy to keep its currency undervalued by increasing its foreign currency reserves will eventually lead to deflation.

Name: A government's policy to keep its currency undervalued by increasing its foreign currency reserves will eventually lead to deflation.
Brand: Quizplus
Rating: 4.8 (49 reviews)

Question

Quizplus · Accepted Answer

Increasing foreign currency reserves to keep a currency undervalued typically leads to inflation in the domestic economy, as it increases the money supply and can lead to higher demand for goods and services.

A Government's Policy to Keep Its Currency Undervalued by Increasing