To Maintain a Fixed Exchange Rate,a Central Bank

question 14

Multiple Choice

To maintain a fixed exchange rate,a central bank

• A) must buy up any excess supply of its currency at that rate
• B) must buy up any excess demand for its currency at that rate
• C) must maintain a fixed money supply
• D) must also maintain a fixed interest rate target
• E) should "buy low and sell high"

---

Definitions:

Frozen Orange Juice

A product made by reducing freshly squeezed orange juice to a frozen concentrate, which can be reconstituted with water for consumption.

Higher Next Month

An anticipation or prediction that a particular metric or value, such as price or interest rate, will increase in the next month.

Market This Month

A snapshot or overview of market activities, trends, and performances for the current month.