When Countries Seek to Maintain Fixed Exchange Rates Through Intervention

question 409

Multiple Choice

When countries seek to maintain fixed exchange rates through intervention, their governments or central banks:

• A) never have to intervene in currency markets because the exchange rate is fixed.
• B) may have to stop printing domestic currency.
• C) must buy domestic currency when foreign demand for it increases.
• D) must sell domestic currency when foreign demand for it increases.

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Definitions:

Henry Murray

An American psychologist who developed the theory of needs and the Thematic Apperception Test (TAT) for personality assessment.

Personality Psychology

The study of individual differences in personality and how they affect behavior and mental processes.

Psychogenic Needs

Psychological desires or requirements that motivate individuals to act in certain ways, often described in terms of satisfaction and emotional well-being.

Personality

The combination of characteristics or qualities that form an individual's distinctive character, often considered in psychology as patterns of thought, feeling, and behavior.