An exchange rate can be maintained only as long as A. None of the above B. The c

Question

An exchange rate can be maintained only as long as
A. None of the above
B. The country's government increases debt financing
C. The country's central bank reserves are available to support currency intervention in the foreign exchange market
D. The country's central bank can increase the domestic money supply An exchange rate can be maintained only as long as
A. None of the above
B. The country's government increases debt financing
C. The country's central bank reserves are available to support currency intervention in the foreign exchange market
D. The country's central bank can increase the domestic money supply
A. None of the above
B. The country's government increases debt financing
C. The country's central bank reserves are available to support currency intervention in the foreign exchange market
D. The country's central bank can increase the domestic money supply

Explanation / Answer

C. The country's central bank reserves are available to support currency intervention in the foreign exchange market

This will help the central bank to maintain the exchange rate and keep it from fluctuating in the foreign exchange market.

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