Epsilon is a country whose unit of currency is the omega. New information leads people to expect that the omega will appreciate next year. To keep the foreign exchange value of the omega fairly steady, the Bank of Epsilon will enough omegas on the foreign exchange market so that the omegas will .
A) buy; demand for; increase
B) buy; demand for; decrease
C) buy; supply of; decrease
D) sell; supply of; increase

Question

Quizplus · Accepted Answer

To keep the omega's value steady, the Bank of Epsilon would sell omegas, increasing their supply on the foreign exchange market, counteracting the expected appreciation.

Epsilon Is a Country Whose Unit of Currency Is the Omega