Figure 13.1 -Refer to Figure 13.1.In a Fixed Exchange Rate Regime,if an Rate

question 23

Multiple Choice

Figure 13.1
-Refer to Figure 13.1.In a fixed exchange rate regime,if an economy is experiencing external disequilibrium at point B,then to peg the exchange rate the central bank has to:

• A) buy domestic currency, sell foreign currency, and shift the LM to the right.
• B) buy foreign currency, sell domestic currency, and shift the LM to the right.
• C) buy domestic currency, sell foreign currency, and shift the IS to the left.
• D) buy foreign currency, sell domestic currency, and shift the IS to the right.

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Chose In Action

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Reversionary Interest

An interest in an estate or property that comes into effect in the future or upon the occurrence of a specific event.

Life Estate

A property interest limited to the duration of an individual's life, after which ownership may revert to another party.