The buying and selling of foreign currency by the central bank is a trade policy whose objective is:
A. reducing purchases of assets abroad.
B. stabilizing the exchange rate against external shocks.
C. stabilizing the interest rate against foreign capital outflows.
D. promoting long term economic growth.
Answer: B
You might also like to view...
The law of increasing opportunity cost explains why
a. opportunity cost is constant along the production possibilities frontier b. the production possibilities frontier is downward sloping c. the production possibilities frontier is curved d. efficient points lie along the production possibilities frontier e. technology remains constant along a production possibilities frontier
Considering capital, marginal factor cost is defined as the
a. extra output produced by employing one more unit of capital (or loanable funds) b. extra total cost attributed to employing one more unit of capital (or loanable funds) c. contribution of capital (or loanable funds) to the final product d. change in capital (or loanable funds) required to produce one more unit of output e. change in total revenue contributed by an extra unit of capital (or loanable funds)