Which of the following statements is NOT correct?
A)Central banks often consider adjusting a currency's value to influence economic conditions.
B)If the U.S. central bank wishes to stimulate the economy, it could weaken the dollar.
C)A weaker dollar could cause U.S. inflation by reducing foreign competition.
D)Direct intervention occurs when the central bank influences the factors that determine the dollar's value.

Question

Which of the following statements is  NOT correct?
A)Central banks often consider adjusting a currency's value to influence economic conditions.
B)If the U.S. central bank wishes to stimulate the economy, it could weaken the dollar.
C)A weaker dollar could cause U.S. inflation by reducing foreign competition.
D)Direct intervention occurs when the central bank influences the factors that determine the dollar's value.

Quizplus · Accepted Answer

Direct intervention by a central bank typically involves buying or selling its own currency in the foreign exchange market to influence its value directly, rather than influencing the factors that determine its value.

Which of the Following Statements Is NOT Correct