When a government influences factors, such as inflation, interest rates, or income, in order to affect currency's value, this is an example of
A)direct intervention.
B)indirect intervention.
C)a freely floating system.
D)a pegged system.

Question

When a government influences factors, such as inflation, interest rates, or income, in order to affect currency's value, this is an example of ​
A)direct intervention.
B)indirect intervention.
C)a freely floating system.
D)a pegged system.

Quizplus · Accepted Answer

Indirect intervention occurs when a government uses economic policies, like adjusting inflation rates, interest rates, or income levels, to influence the value of its currency indirectly, rather than directly buying or selling the currency in the foreign exchange market.

When a Government Influences Factors, Such as Inflation, Interest Rates