The Basic Type of Intervention by Central Banks Under the Managed

question 230

Multiple Choice

The basic type of intervention by central banks under the managed floating exchange rate system is to

• A)readjust the peg for exchange rates.
• B)buy and sell currencies to influence supply and demand for foreign exchange.
• C)renegotiate the rate at which foreign currencies can be converted into gold.
• D)make pronouncements but then do nothing and let the market set the exchange rate.

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Definitions:

Tax Rates

The percentage at which an individual or corporation is taxed by the government on income or profits.

Illegal Immigrant Workers

Individuals who are employed in another country without the legal authorization to do so, often facing precarious working conditions and low wages.

Foreign Investment

Investments made by individuals, companies, or governments in business interests in another country, in the form of direct investments or buying securities.

Labor Productivity Growth

The increase in the amount of goods and services produced per unit of labor over a period of time.