A short-term speculative rise in the worldwide value of domestic currency could be moderated by a central bank decision to
A. Sell domestic currency in the foreign exchange market.
B. Buy domestic currency in the foreign exchange market.
C. Sell foreign currency in the foreign exchange market.
D. Increase domestic interest rates.
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4 comments on “Wiley CPA BEC MCQ: Economics”
I meant sell them for $2, making $1 profit.
Well, if the value of the dollar went from $1 to $2, I think it would be fortuitous of them to sell the currency for a $2 profit. Buying domestic currency when it’s valued double short-term is a bad investment. When the currency returns to $1, the bank will have spent twice the money.
I say A.
Really, B? Id have said A. What is the answer?
B