A measure for preventing the external value of the naira from falling is for the government to
increase its spending with foreign reserve
sell its own currency
reduce interest rate
buy its currency with foreign reserve
Explanation
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The correct answer is D because when it buys it's own currency with foreign reserve, it won't be in circulation and this would lead to increased in demand for it
Option D
Explanation: The bank can buy its own currency by using foreign currency that it has in its own reserves. This not only cuts off the currency's depreciation, but also controls the money supply by reducing the amount in circulation. The same is true if the central bank decides to do the opposite—by selling its own currency if it appreciates too much.
The correct answer is option B - sell its own currency. This is because when a government sells its own currency, it reduces the supply of its currency in the market and increases demand for it, which in turn increases its value relative to other currencies
