Government controls can only affect the supply of a given currency for sale and not the demand.

Question

Quizplus · Accepted Answer

Government controls can affect both the supply and demand for a currency. For example, if a government increases interest rates, it can raise demand for its currency by making it more attractive to investors, while simultaneously reducing the supply of currency in circulation by limiting borrowing and lending. Additionally, government policies and regulations can impact the demand for a currency through factors such as trade agreements, geopolitical events, and economic stability.

Government Controls Can Only Affect the Supply of a Given