If the government wants to decrease 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 supply of money in the economy, which can lead to lower interest rates and inflation, which can decrease the value of a currency in foreign exchange markets. Therefore, if the government wants to decrease the value of its currency, it can use expansionary monetary policy as a tool.

If the Government Wants to Decrease the Value of Its