A country with a managed float that wishes to WEAKEN its currency may choose to raise domestic interest rates to attract additional capital from abroad.

Question

Quizplus · Accepted Answer

A country with a managed float that wishes to weaken its currency would typically lower domestic interest rates to discourage foreign investment and make the currency less attractive. Raising interest rates would have the opposite effect and strengthen the currency.

A Country with a Managed Float That Wishes to WEAKEN