Under a fiXed Exchange-Rate System, Which of the Following Will

question 166

Multiple Choice

Under a fixed exchange-rate system, which of the following will not occur if the demand for the local currency rises?

• A) The central bank will accumulate foreign-exchange reserves.
• B) The domestic money supply will increase.
• C) As a result of the central bank's actions to maintain the peg, a positive item appears in the balance-of-payments statement.
• D) The economy will experience an increase in inflationary pressure.

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Memory

The capability through which the brain retains and recalls data.

Authoritative

A leadership style characterized by high expectations and support, balancing firm direction with responsiveness to needs.

High Standards

Expectations or requirements that are significantly above average, often challenging to meet or maintain.

Sympathetic

Part of the autonomic nervous system that prepares the body for physical activity and is often referred to as the "fight or flight" response.