The action of central banks buying and selling their own currency in large enough quantities to affect the price of that currency is better known as ______.

Question

Quizplus · Accepted Answer

The action of central banks buying and selling their own currency in large enough quantities to affect the price of that currency is called an exchange market intervention. This is typically done to influence the exchange rate of a currency, in order to make exports more competitive or to stabilize the value of the currency. A dirty float refers to a floating exchange rate system where a country's central bank intervenes in the foreign exchange market to influence the value of the currency. Trade adjustment refers to the process by which a country seeks to reduce imbalances in its international trade, such as by lowering its trade deficit. Opportunity cost refers to the cost of forgoing the next best alternative when making a decision.

The Action of Central Banks Buying and Selling Their Own