Balance-Of-Payments Adjustments

question 14

Multiple Choice

Balance-of-payments adjustments

• A) in a fixed exchange system, intervention does not change the money supply.
• B) in a fixed exchange system, intervention changes the money supply.
• C) in a fixed exchange system, does not change the relative prices of imports and exports between two trading countries.
• D) in a floating exchange system, does not change through exchange-rate movements.
• E) in a floating exchange system, internal prices do not remain stable.

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