If a Country Finds Its Fixed Rate Currency Falling,it

question 321

Multiple Choice

If a country finds its fixed rate currency falling,it:

• A) can use foreign exchange reserves to purchase some of its currency.
• B) can add to its foreign exchange reserves by selling some of its currency.
• C) cannot use monetary policy to maintain its exchange rate.
• D) will allow its currency to devaluate.

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Definitions:

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the allocation of financial resources towards goods, services, or investments that are most favored or prioritized by an individual or entity.

City Council

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Median-Voter Theorem

A theory suggesting that the outcome of majority voting processes will reflect the preferences of the median voter when preferences are single-peaked and voters are fully informed.

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