A central bank that desires a (an) ______ of its currency would likely implement a ______ monetary policy.
A) depreciation, contractionary
B) depreciation, neutral
C) appreciation, contractionary
D) appreciation, expansionary

Question

Quizplus · Accepted Answer

A central bank that desires an appreciation of its currency would likely implement a contractionary monetary policy, which involves reducing the money supply and increasing interest rates to slow down economic growth and reduce inflationary pressures. This policy can make the currency more attractive to foreign investors, increasing demand for it and leading to an appreciation of its value.

A Central Bank That Desires a (An) ______ of Its