Who Enforces a Fixed Exchange Rate

question 61

Multiple Choice

Who enforces a fixed exchange rate?  

• A) national governments, who establish appropriate trade barriers for each country with whom they trade 
• B) national governments, who manipulate gold reserves appropriately 
• C) central banks, who buy and sell appropriate currencies 
• D) the International Monetary Fund, which offers loans to appropriate countries

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Definitions:

Economic Value

The measurement of the benefit provided by a good or service to an economic agent.

Quarterly Dividends

Dividends paid by a corporation to its shareholders at the end of each quarter of the fiscal year.

Compounded Quarterly

Interest calculation method where interest is added to the principal four times a year, affecting the total interest earned or paid.

Redeemed

In financial terms, to exchange a financial instrument like a bond or coupon for its value in cash or goods; also refers to utilizing a reward or benefit.