To prevent the dollar from depreciating, the U.S. central bank can try to fix the currency value of the dollar when they
A) buy U.S. dollars in the foreign exchange market.
B) sell U.S. dollars in the foreign exchange market.
C) abandon the U.S. dollar and use another country's currency as its legal currency.
D) buy foreign currencies in the foreign exchange market.

Question

Quizplus · Accepted Answer

By buying U.S. dollars in the foreign exchange market, the central bank increases demand for the dollar, which can help prevent its depreciation.

To Prevent the Dollar from Depreciating, the U