Under a Fixed Exchange Rate System, an Excess Demand for the Australian

question 4

Multiple Choice

Under a fixed exchange rate system, an excess demand for the Australian dollar in the FOREX market often resulted in:

• A) an increase in liquidity in the financial system and a fall in interest rates.
• B) a decrease in liquidity in the financial system and an increase in interest rates.
• C) a decrease in liquidity in the financial system and a decrease in interest rates.
• D) an increase in liquidity in the financial system and an increase in interest rates.

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Definitions:

Implied Warranty

A legal assumption that a product will meet basic standards of quality and functionality, even if not expressly stated in a contract.

Ratify

To officially approve or confirm an agreement or treaty, making it formally valid.

Unauthorized Act

An action that is taken without official permission, approval, or authority.

Criminal Liability

The legal responsibility a person or entity has for committing an act that is considered a crime by law.