Exchange market interventions involve
A)fixing the exchange rate through purchases and sales of currency.
B)fixing the prices of goods in the domestic markets.
C)fixing the prices of goods imported from foreign countries.
D)imposing a tariff on all foreign imports.
E)allowing the currency exchange rate to be determined by the foreign exchange markets.

Question

Quizplus · Accepted Answer

Exchange market interventions involve fixing the exchange rate through purchases and sales of currency by central banks or governments. This is done to influence the value of a country's currency relative to other currencies, and can be used to stabilize currency values during times of volatility or economic uncertainty. The other options mentioned do not relate to currency exchange rate interventions.

Exchange Market Interventions Involve