Under a fiXed Exchange Rate Regime, the Central Bank Can

question 71

True/False

Under a fixed exchange rate regime, the central bank can support the exchange rate as long as it has an adequate supply of foreign currency reserves.

---

Definitions:

Cartel

A cartel refers to an association of independent businesses or countries that collaborate to manipulate prices and limit competition for certain goods or services.

Cartel

An agreement between competing firms to control prices or exclude entry of a new competitor in a market, usually to increase market power and profits.

Formal Agreement

refers to a legally binding contract between parties that outlines specific obligations and rights.

Covert Collusion

A secret agreement between firms to fix prices, limit production, or engage in other practices to restrict competition illegally.