If There Is an Excess Supply of the Domestic Currency

question 41

Multiple Choice

If there is an excess supply of the domestic currency at a fixed exchange rate,

• A) the currency will undergo a devaluation
• B) the currency will appreciate
• C) the country must switch to a floating exchange rate
• D) the central bank must buy up that excess supply or the exchange rate will fall
• E) the central bank must be up that excess supply or the exchange rate will rise

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Definitions:

Price Discrimination

A pricing strategy where identical or substantially similar goods or services are sold at different prices by the same provider in different markets.

Monopoly

A market structure characterized by a single seller who has exclusive control over a particular good or service.

Criminal Offenses

Acts or omissions punishable by law as defined by statute or common law.

Clayton Act

A U.S. antitrust law enacted in 1914 aimed at promoting competition and preventing monopolies by prohibiting certain anti-competitive practices.