Suppose a central bank tries to keep exchange rates fixed. When there is an increase in the demand for foreign goods, the central bank will most likely
A) buy foreign currency in exchange for the domestic currency.
B) do nothing.
C) sell the domestic currency in exchange for foreign reserves.
D) use foreign reserves to buy the domestic currency.
D
You might also like to view...
Although tacit collusion can enhance the price-setting power of the participating firms, it can also result in greater efficiency in production, which also benefits society
Thus, it is not immediately clear, a priori, when tacit collusion actually hurts or helps consumers. Indicate whether the statement is true or false
If a firm is experiencing economies of scale, then the long-run average cost curve is
A) falling. B) rising. C) horizontal. D) shifting.
China's use of which of the following types of energy is causing high levels of carbon dioxide pollution?
a. oil b. natural gas c. electricity d. coal e. diesel fuel
Canadian exports involve an:
A. outflow of foreign currencies from Canada to foreigners. B. inflow of foreign currencies from foreigners to Canada. C. outflow of Canadian dollars from Canada to foreigners. D. inflow of Canadian dollars from foreigners to Canada.