Which Method Would NOT Maintain a Fixed Exchange Rate

question 340

Multiple Choice

Which method 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:

Demand Curve

A graph showing the relationship between the price of a good and the amount that consumers are willing and able to purchase at different prices.

Hand Calculators

Portable electronic devices used for performing calculations, ranging from basic arithmetic to complex mathematical operations.

Price Elastic

Refers to the responsiveness of the quantity supplied or demanded of a good or service to a change in its price, often interchangeable with Price Elasticity of Demand or Supply depending on context.

Quantity Demanded

The total amount of a good or service that consumers are willing and able to purchase at a given price level in a given market at a specific time period.