A Fixed Exchange Rate Is an Exchange Rate Whose Value

question 57

Multiple Choice

A fixed exchange rate is an exchange rate whose value

• A) is determined by the law of one price.
• B) varies according to the supply and demand for the currency in the foreign exchange market.
• C) is set by official government policy.
• D) reflects the comparative advantage of the home country versus other foreign countries.
• E) is established annually by the International Monetary Fund.

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Definitions:

Moral Worth

The value or respectability of actions or decisions based on ethical principles.

Motive

A reason for doing something, especially one that is hidden or not obvious.

Subjective Plan

A course of action based on personal perspectives, feelings, or opinions rather than objective evidence or analysis.

Imperative

Something that is necessary or of great importance, often used in the context of commands or duties.