Multiple Choice
The National Bank of Fragana implements monetary policies that help to control currency supply and maintain price stability. When there is a demand, the bank prints more money. This increases currency supply and stimulates borrowing and growth within Fragana. Predict the most likely outcome when this increase causes a decline in the purchasing value of money in Fragana.
A) Inflation decreases.
B) Fragana's currency depreciates.
C) Exporting nations that have strong competition with Fragana deliberately strengthen their currency to make their exports cheaper.
D) Importing nations that have strong competition with Fragana try to weaken their currencies to increase their purchasing power.
Correct Answer:
Verified
Correct Answer:
Verified
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