Under a System of Fixed Exchange Rates,if the International Reserves

question 74

Multiple Choice

Under a system of fixed exchange rates,if the international reserves of a country's central bank become exhausted,it can no longer prevent its currency from

• A) undergoing price inflation
• B) undergoing price deflation
• C) appreciating
• D) depreciating

---

Definitions:

Vintage

A term used to describe the age of an item, often indicating quality, rarity, and value, particularly in the context of wines, cars, and collectibles.

Stored

Kept or accumulated for future use.

Present Value

The present-day valuation of an anticipated amount of money or cash flows, considering a predetermined rate of return.

Endowment

An economic term referring to all assets, financial and non-financial, given to an individual or institution for a specific purpose.