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Macroeconomics

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Moderate

Foreign Exchange and Currency Appreciation

MACRO-7JBUWS

Assume flexible exchange rates, which of the following policy interventions is likely to appreciate the value of country X's currency?

A

An increase in governments spending when there is a fiscal deficit.

B

The central bank's buying of government bonds.

C

An increase in income taxes when there is a fiscal deficit.

D

An increase in the tax credit for income from savings.