When Market Forces Start to Change a Fixed Exchange Rate

question 24

Multiple Choice

When market forces start to change a fixed exchange rate, the government:

• A) must buy or sell currency to bring the market back to the fixed rate.
• B) holds the exchange rate constant at the new equilibrium.
• C) only intervenes if the change in the exchange rate would harm export-focused domestic industries.
• D) None of these are true.

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Definitions:

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The number of votes a shareholder or member is authorized to cast in a company's or organization's decision-making process.

Illegal Distribution

involves the unauthorized selling or distribution of goods or services, often violating copyright laws or regulatory statutes.

Liable

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A portion of a company's earnings distributed to its shareholders, usually in the form of cash or additional shares.