If a Nation Wants to Maintain a Fixed Exchange Rate

question 81

Multiple Choice

If a nation wants to maintain a fixed exchange rate at a time when supply and demand are causing an excess of imports over exports, the nation might

• A) shift to a more expansionary monetary policy.
• B) shift to a more restrictive monetary policy.
• C) reduce its trade barriers (tariffs and quotas).
• D) tax exports and subsidize imports.

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