Under a Fixed Exchange Rate System,the Central Bank of a Country

question 68

Multiple Choice

Under a fixed exchange rate system,the central bank of a country experiencing a balance of payments surplus will:

• A)increase the supply of domestic currency to prevent currency depreciation.
• B)increase the demand for domestic currency to prevent currency depreciation.
• C)increase the supply of domestic currency to prevent a currency appreciation.
• D)increase the demand for domestic currency to prevent a currency appreciation.

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Definitions:

Development

Training that augments the skills and knowledge of managers and professionals.

Orientation

Familiarizing newly hired employees with fellow workers, company procedures, and the physical properties of the company.