A Country Wants to Maintain a Fixed Exchange Rate with the Dollar

question 178

Multiple Choice

A country wants to maintain a fixed exchange rate with the dollar, but at the current exchange rate its currency is in excess. The country can adopt all of the following policies to maintain its exchange rate EXCEPT:

• A)buy domestic currency and sell U.S. dollars in the foreign exchange market.
• B)sell domestic currency and buy U.S. dollars in the foreign exchange market.
• C)impose foreign exchange controls.
• D)contract the money supply to raise domestic interest rates.

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Definitions:

Carcinogen

Any substance or agent that promotes the formation of cancer by altering cellular metabolism or damaging DNA directly in cells.

Exposure

Refers to the condition of being subjected to something (such as environmental conditions, chemicals, or radiation) that can have a direct impact on health, safety, or well-being.

Detectable Symptoms

Observable signs or indications of a disease, disorder, or other condition that can be noticed and identified.

Mutagens

Agents that cause mutations or changes in the DNA of organisms.