If a Government Fixes the Exchange Rate So as to Generate

question 191

Multiple Choice

If a government fixes the exchange rate so as to generate a surplus of the domestic currency, the exchange rate (U.S. dollars per unit of the other currency) will tend to _____. To maintain the fixed exchange rate, the government must _____ the domestic currency.

• A) fall; increase the international demand for
• B) rise; increase the international demand for
• C) fall; decrease the international demand for
• D) fall; increase the domestic supply of

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Definitions:

Modeling

The act of learning by observing and imitating the behaviors of others.

Cytokine

Small proteins released by cells that have a specific effect on the interactions and communications between cells, playing a crucial role in the body's immune response.

Galactose

A simple sugar that is a component of lactose, found in milk and dairy products, and is metabolized by the body into glucose.

Lateral Hypothalamus

An area of the brain thought to control hunger and thirst; damage can reduce the desire to eat and drink.