Under a Fixed Exchange Rate System

question 100

Multiple Choice

Under a fixed exchange rate system:

• A) a foreign exchange market does not exist.
• B) central bank intervention in the foreign exchange market is not necessary.
• C) central bank intervention in the foreign exchange market is often necessary.
• D) central bank intervention in the foreign exchange market is not allowed.

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Definitions:

APC

In economics, stands for Average Propensity to Consume, which is the fraction of income spent on consumption.

APS

The Average Propensity to Save, which is the fraction of total income that households save rather than spend on consumption.

APC

Stands for Average Propensity to Consume, which is the fraction of income that households spend on consumption rather than saving.

APS

Automatic Payment System, a system allowing for automatic transfers of payments, often in financial contexts; the term can refer to multiple concepts depending on the context.