In a Fixed Exchange Rate System,if the Demand for a Currency

question 14

Multiple Choice

In a fixed exchange rate system,if the demand for a currency increases

• A) then the government of that country must stand ready to sell its currency.
• B) then the government of that country must stand ready to purchase its currency.
• C) then the government of that country must stand ready to sell foreign currencies.
• D) then the government must prepare the citizens of that country for the economic shock that will come in the future.

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