When would a central bank be able to exert the closest control over the money supply of the country? A If it intervened in the foreign exchange market to influence the value of domestic currency. B If it only issued domestic currency at a fixed price in exchange for US$. C If the country was part of a monetary union with other countries. D If the domestic currency was allowed to float freely in the foreign exchange market.
Mark scheme
Marking points from the official mark scheme (Oct/Nov 2019). The mark or mark type is shown in brackets.
- [1] Correct option: D
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