____________ are often used to protect a nation against loss of its foreign currency reserves,which might damage its prospects for repaying international loans and purchasing goods and services abroad.

Question

Quizplus · Accepted Answer

Foreign exchange controls are designed to restrict the outflow of a country's foreign currency reserves. By limiting the amount of foreign currency that can be converted or transferred abroad, a government can better protect its reserves and prevent damage to its ability to repay international loans or purchase necessary goods and services from foreign suppliers. The other options listed may also have some impact on a nation's foreign currency reserves or financial stability, but foreign exchange controls are the most direct tool for achieving this goal.

____________ Are Often Used to Protect a Nation Against Loss