The Central Bank of Country X Buys and Sells Its

question 12

Multiple Choice

The central bank of Country X buys and sells its own currency to ensure that the currency is always exchanged in a ratio of 2:1 with the currency of Country Y. What can we conclude about these two currencies?

• A) Country X is using the Euro.
• B) Country X has pegged its currency to the currency of Country Y.
• C) Country X has an undesirable currency.
• D) Country X allows its currency to float relative to the currency of Country Y.

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Definitions:

Conjunction

In logic, a connective that combines multiple statements or propositions to form a single proposition that is true only if all its components are true.

Contradictory Statements

Assertions that are directly opposed to each other, so that if one is true, the other must be false.

Truth Tables

A mathematical table used in logic to compute the functional values of logical expressions on each of their functional arguments, showing all possible conditions.

Opposite Truth Value

The truth value of a statement that is the direct negation of the original statement's truth value.