Under a Fixed Exchange Rate, a Balance-Of-Payments Surplus for a Country

question 10

Multiple Choice

Under a fixed exchange rate, a balance-of-payments surplus for a country will lead to a __________ in the money supply as the country's central bank __________ in order to maintain the fixed exchange rate.

• A) rise; purchases domestic currency
• B) rise; purchases foreign exchange
• C) fall; sells domestic currency
• D) fall; sells foreign exchange

---

Definitions:

Hard Disk

A hardware device used for storing and retrieving digital data using magnetic storage, typically consisting of one or more rigid rapidly rotating disks coated with magnetic material.

Source Program

The original code written by a programmer in a high-level programming language before it is compiled or interpreted.

Assembly Language

Assembly language is a low-level programming language for a computer, or other programmable device, where there is a very strong correspondence between the language and the architecture's machine code instructions.

Structured Design

A fundamental approach in software engineering where the structure of systems is based on the subdivision of problems into smaller problems.