How does a country maintain a fixed exchange rate?
A) By intervening in the foreign exchange markets and buying or selling currency as needed to achieve the desired exchange rate.
B) By forbidding foreign exchange markets to trade currency at anything other than the official exchange rate.
C) By setting domestic interest rates to achieve purchasing power parity as the desired exchange rate.
D) By intervening in import and export markets to achieve the desired current account and exchange rate.
A
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At the point of maximum profit, marginal revenue equals
a. variable cost. b. fixed cost. c. average total cost. d. marginal cost.
The real balances effect is caused by an inverse relationship between the price level and the real value of financial assets with fixed nominal value
a. True b. False Indicate whether the statement is true or false
Vertical equity and horizontal equity are associated with
a. the benefits principle of taxation. b. the ability-to-pay principle of taxation. c. taxes that have no deadweight losses. d. falling marginal tax rates.
Briefly explain how the concept of rational ignorance explains the tendency many people have not to learn about political candidates
What will be an ideal response?