Which of the Following Is an Example of a Managed

question 62

Multiple Choice

Which of the following is an example of a managed float?

• A) The Fed buys or sells U.S.dollars in order to maintain a fixed $1.05 per euro exchange rate.
• B) The European Central Bank buys or sells euros in order to "peg" the price level.
• C) The Bank of England buys or sells British pounds in order to maintain a fixed exchange rate with the U.S.dollar.
• D) The Bank of Japan intervenes in the foreign exchange market to prevent a rapid depreciation of the yen.
• E) The Bank of Japan intervenes to set the tax rate very close to the tax rates of other countries.

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