Under a Fixed Exchange Rate Regime,if the Domestic Currency Is

question 39

Multiple Choice

Under a fixed exchange rate regime,if the domestic currency is initially undervalued,that is,above par,the central bank must intervene to sell the ________ currency by purchasing ________ assets.

• A)domestic;foreign
• B)domestic;domestic
• C)foreign;foreign
• D)foreign;domestic

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Definitions:

Chart Of Accounts

A list of the accounts in the ledger.

Balance Sheet

An accounting summary that captures a firm's financial status at a particular instant, outlining the company's resources, obligations, and equity held by shareholders.

Ledger

A book or collection of financial accounts where financial transactions are recorded.

Cash Payment

A transaction where a payment is made using physical currency or through electronic funds transfer, directly settling an obligation.