What Is Meant by a ?Xed Exchange Rate Regime

question 79

Multiple Choice

What is meant by a ?xed exchange rate regime?

• A) The government sets an exchange rate and then uses the central bank to maintain the value of the
• Currency at that rate .
• B) The exchange rate is set by the market forces of supply and demand.
• C) The government claims that the exchange rate ?oats, but it is in fact managed by the central bank
• D) The government uses the central bank to maintain the exchange rate within a wide band

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