With Fixed Exchange Rates,assume That the Home Currency Becomes Undervalued

question 34

Multiple Choice

With fixed exchange rates,assume that the home currency becomes undervalued.To maintain the fixed exchange rate,the home country's central bank must

• A) purchase the currency,and as a result it loses international reserves
• B) purchase the currency,and as a result it gains international reserves
• C) sell the currency,and as a result it loses international reserves
• D) sell the currency,and as a result it gains international reserves

---

Definitions:

Null Hypotheses

A statistical hypothesis that assumes no significant difference or effect exists within a set of observations.

Alternative Hypotheses

In hypothesis testing, statements that are accepted if the evidence provides sufficient support for them being true, as opposed to the null hypothesis.

Low Income Housing

Housing units that are affordable for individuals or families with low yearly income, often supported by government programs.

Commute

The process of traveling between one's place of residence and place of work or study.