If the government wants to increase the value of its currency in foreign exchange markets, it can use expansionary monetary policy.

Question

Quizplus · Accepted Answer

Expansionary monetary policy involves increasing the money supply in the economy, which typically leads to a decrease in the value of the currency in foreign exchange markets. To increase the value of the currency, the government would need to use contractionary monetary policy, such as decreasing the money supply or increasing interest rates.

If the Government Wants to Increase the Value of Its