Which of the following is false?
A)One reason why central banks may intervene in financial marks is to resolve a severe but temporary liquidity crisis and to stabilize international financial markets.
B)One reason why central bankers may intervene in foreign exchange markets is they believe exchange rates are deviating significantly from fundamental underlying values (that is, the dollar is overvalued or undervalued because of speculation in the market).
C)In late 2000, central banks of major industrialized countries carried out a coordinated intervention to boost the value of the sagging euro.
D)Central bank intervention has proven successful in that the goals of the intervention have always been met.

Question

Quizplus · Accepted Answer

Central bank intervention has not always been successful in meeting its goals, so option D is false. While intervention can sometimes result in the desired outcome, there have also been instances where intervention has failed or had unintended consequences.

Which of the Following Is False