If a country does not have adequate amounts of foreign exchange to support intervention in the foreign exchange market then it may borrow foreign exchange and increase the country's:
A) equity.
B) debt.
C) sterilization.
D) FDI.
E) money supply.

Question

Quizplus · Accepted Answer

When a country borrows foreign exchange, it increases its debt because it is taking on a liability that must be repaid in the future.

If a Country Does Not Have Adequate Amounts of Foreign