In a Fixed Exchange Rate System, a Country Would Accumulate

question 9

Multiple Choice

In a fixed exchange rate system, a country would accumulate reserves when the current account is in _____ and use these reserves during period when the country has a current account balance in ______.

• A) surplus, surplus
• B) surplus, deficit
• C) deficit, deficit
• D) deficit, surplus
• E) balanced, surplus

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Definitions:

Tax Bases

A tax base is the defined amount of assets, income, or other economic activity upon which a government levies taxes.

Construction Industry

The sector of the economy that involves the construction, maintenance, and design of buildings, infrastructure, and other physical structures.

New Deal

A series of programs, public work projects, and financial reforms and regulations enacted by President Franklin D. Roosevelt in the United States during the 1930s to help recover from the Great Depression.

Franklin Roosevelt

The 32nd President of the United States, who led the country during the Great Depression and World War II, known for his New Deal policies.