question 7 (1 point) saved assume that the canadian dollar is falling against most other major currencies…

question 7 (1 point) saved assume that the canadian dollar is falling against most other major currencies and this has become a concern to the canadian government. what is the quickest, short - term action that the bank of canada could take to try strengthen the canadian dollar? a) reduce interest rates. b) sell canadian dollars in the open market. c) buy canadian dollars in the open market. d) raise interest rates.

question 7 (1 point) saved assume that the canadian dollar is falling against most other major currencies and this has become a concern to the canadian government. what is the quickest, short - term action that the bank of canada could take to try strengthen the canadian dollar? a) reduce interest rates. b) sell canadian dollars in the open market. c) buy canadian dollars in the open market. d) raise interest rates.

Answer

Brief Explanations:

When a central bank wants to strengthen its currency in the short - term, buying its own currency in the open market reduces the supply of that currency in circulation. Reducing the supply increases the value of the currency. Selling the currency would have the opposite effect. Reducing interest rates makes the currency less attractive to foreign investors, and raising interest rates is a long - term measure in comparison.

Answer:

c) Buy Canadian dollars in the open market.