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Governments Are Involved in the Foreign Currency Markets for Two

Question 20

Multiple Choice

Governments are involved in the foreign currency markets for two primary reasons:


A) because foreign currency can be used as a store of value and to manipulate the value of their own currency.
B) to protect against inflation and to control domestic interest rates.
C) so that they can take advantage of discrepancies in currency values in different markets and to protect the value of their currency.
D) to monitor the value of their currency and to control their balance of trade.

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