When Countries Seek to Maintain Fixed Exchange Rates Through Intervention

question 28

Multiple Choice

When countries seek to maintain fixed exchange rates through intervention, their governments or central banks

• A) rarely have to intervene in currency markets because the exchange rate is fixed.
• B) can always rely on foreign governments or central banks to intervene in currency markets when necessary.
• C) must buy domestic currency when foreign demand for their currency increases.
• D) must sell domestic currency when foreign demand for their currency increases.

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Definitions:

Phenylalanine

An essential amino acid important in the biosynthesis of proteins.

Recessive Gene

A type of gene that expresses its traits only when paired with an identical or similar gene, as opposed to a dominant gene that can express its traits when paired with a different gene.

21st Chromosome

A chromosome in humans that, when an individual has three copies (trisomy 21) rather than the usual two, causes Down syndrome.

Down Syndrome

A genetic disorder caused by the presence of all or part of a third copy of chromosome 21, characterized by developmental delays, physical growth limitations, and distinctive facial features.