Which method limits foreign investment through economic policies?

Currency stability measures are designed to limit foreign investment through economic policies by maintaining the stability and value of a currency. When a country implements policies to stabilize its currency, it can deter speculative foreign investments that seek to profit from currency fluctuations. By creating a stable economic environment, these measures reduce volatility, making it less attractive for investors who thrive on movement in currency values.

In contrast, direct market trading does not necessarily restrict foreign investment; rather, it facilitates it by providing a platform for buying and selling securities. Increasing the money supply usually aims to stimulate economic growth and can attract more foreign investment rather than limit it. International trading agreements, while they can set the terms of trade, often do not directly restrict foreign investment but instead promote it by providing more favorable conditions for trade and investment flows.

Thus, currency stability measures serve as a critical mechanism for regulating foreign investment through focused economic policy aimed at maintaining a consistent and reliable currency value.