Intervention in the foreign exchange market means:
A) the government or central bank buys or sells foreign exchange.
B) the government restricts individuals from buying and selling foreign exchange.
C) the government restricts the importation of certain goods.
D) the government devalues the currency in the foreign exchange market.
E) that the central bank manipulates interest rates.

Question

Quizplus · Accepted Answer

Intervention in the foreign exchange market typically involves the government or central bank buying or selling foreign currency in order to influence the exchange rate. This can be done to stabilize the currency, reduce volatility, or achieve a desired exchange rate level.

Intervention in the Foreign Exchange Market Means