Question

In 2015, Switzerland stopped pegging its currency to the Euro, and instead reduced interest rates in an attempt to lower the value of its currency. This shift was a switch from _____ to _______

Question 4 options:

	Indirect Intervention / Direct Intervention
	Direct Intervention / Indirect Intervention
	Capital Controls / Indirect Intervention
	Direct Intervention / Capital Controls

Answer 1

Answer

Explanation

Direct intervention : It is to intervene directly in the foriegn exchange market by selling or buying currencies .

Indirect intervention :It is to change the domestic money supply or interest rates .

So decrease in the money supply will cause a other currency appreciation .

SO According to the explanation it is switch from Direct intervention to indirect intervention .

So option b is correct - Direct intervention/indirect intervention.

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