Which of the Following Would NOT Maintain a Fixed Exchange

question 274

Multiple Choice

Which of the following would NOT maintain a fixed exchange rate?

• A)trading currency in the foreign exchange market
• B)changing monetary policy to shift the supply and demand curves for its own currency
• C)implementing foreign exchange controls
• D)passing a law requiring that the exchange rate remain fixed

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Definitions:

Resource Demand

The desire and ability of producers to acquire resources at various prices, which are necessary for production of goods and services.

Labor Cost

The total expense incurred by employers for wages, salaries, and benefits paid to their employees.

Total Cost Ratio

The sum of all costs, both fixed and variable, associated with producing goods or services, divided by the quantity produced.

Elasticity of Labor Demand

A measure of how the quantity of labor demanded by employers changes in response to a change in wages or salary rates.