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:

Native American Rights Fund

A legal organization established in 1970 to defend and advance the rights of Native American tribes, communities, and individuals.

Tribal Ownership

The collective ownership of land, resources, or entities by indigenous tribes or groups, often governed by tribal laws and customs.

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A formal gathering or assembly at the national level, typically of representatives or delegates, involved in discussing and making decisions on matters of national importance.

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A German-born American diplomat and political scientist who served as National Security Advisor and later Secretary of State under Presidents Nixon and Ford, known for his role in shaping U.S. foreign policy, particularly in relation to Vietnam and the Soviet Union.