Substantial intervention in foreign exchange markets by a central bank in an attempt to maintain an exchange rate is called
A)sterilization
B)synchronization
C)dirty floating
D)managed neutralization
E)open market operations

Question

Quizplus · Accepted Answer

Substantial intervention in foreign exchange markets by a central bank in an attempt to maintain an exchange rate is called dirty floating. Sterilization refers to offsetting the effects of foreign exchange intervention on a country's money supply, while synchronization and managed neutralization are not recognized terms in the context of foreign exchange markets. Open market operations refers to the buying and selling of government securities by a central bank as a means of controlling the money supply.

Substantial Intervention in Foreign Exchange Markets by a Central Bank