Why would a government typically pursue a policy to strengthen its currency, and what economic measure could it employ to achieve this objective?

a.To reduce the cost of imports and improve domestic purchasing power, it can implement monetary tightening.

b.To attract foreign investors and stimulate economic growth; it can implement monetary easing.

c.To enhance the competitiveness of its exports and boost trade; it can implement fiscal austerity. which is correct option.

2.Which type of foreign exchange risk is associated with exchange rate fluctuations during the settlement of specific cross-border transactions?

a.Market risk

b.Operational risk

c.Transaction risk which is correct option.