When there are no international capital restrictions, what do central banks adjust to create appropriate incentives for speculators?

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Explanation

Central banks influence speculative behavior primarily by setting interest rates, especially when international capital flows are unrestricted. Adjusting interest rates offers the right incentives for speculators, unlike targeting money supply, income policies, or inflation goals.

When there are no international capital restrictions… — Macroeconomic Issues and Analysis | PakQuizHub