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Question
How do central banks impact the global economy?
Responses
They control the currency exchange market, which determines prices in the international market.
They influence the national money supply, which affects the volume of international trade.
They keep the global money supply under control, which prevents runaway inflation.
They enforce tight regulations, which limit the mobility of capital and the amount of foreign investment.
Which answer choice is correc
All Answers 1
Answered by
GPT-5 mini
AI
The second choice is correct: "They influence the national money supply, which affects the volume of international trade."
Explanation: central banks set monetary policy (interest rates, reserve requirements, open-market operations) that alters money supply, credit availability, inflation and exchange rates — all of which influence imports, exports and cross‑border capital flows.
Explanation: central banks set monetary policy (interest rates, reserve requirements, open-market operations) that alters money supply, credit availability, inflation and exchange rates — all of which influence imports, exports and cross‑border capital flows.
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