The Figure Given Below Depicts the Foreign Exchange Market for British

question 121

Multiple Choice

The figure given below depicts the foreign exchange market for British pounds traded for U.S. dollars.Figure 22.2

-Under a fixed exchange-rate system, in order to maintain the exchange rate:

• A)governments must adopt a laissez-faire economic policy.
• B)all trading partners must enjoy the same level of economic growth.
• C)currencies must be inconvertible.
• D)the imports of one country must equal the exports of its trading partner.
• E)governments must intervene in the foreign exchange market.

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