If a Country Wants to Keep Its Exchange Rate Fixed

question 228

Multiple Choice

If a country wants to keep its exchange rate fixed, it must

• A) allow its currency value to vary with market supply and demand in foreign exchange markets.
• B) be a member of the IMF.
• C) vary the amount of its national currency supplied at any given exchange rate in foreign exchange markets when necessary.
• D) eliminate its foreign exchange reserves.

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Definitions:

Solid Catalyst

A solid catalyst is a substance that increases the rate of a chemical reaction without being consumed in the process, and it maintains its solid physical state during the reaction.

Reactants

Starting materials in a chemical reaction, which are expended in the creation of the final substances.

Enhanced Surface Area

The increase in the surface area of a material, often to improve its reactivity, adsorption properties, or efficiency in catalytic processes.

Heterogeneous Catalysis

A process where the catalyst is in a different phase than the reactants, facilitating chemical reactions without being consumed.