The Basic Type of Intervention by Central Banks Under the Managed

question 5

Multiple Choice

The basic type of intervention by central banks under the managed floating exchange rate system is to:

• A) Readjust the peg for exchange rates
• B) Buy and sell currencies to influence supply and demand for foreign exchange
• C) Renegotiate the rate at which foreign currencies can be converted into gold
• D) Make pronouncements but then do nothing and let the market set the exchange rate

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