If the Exchange Rate of Currency a Is Fixed to a Unit

question 22

Multiple Choice

If the exchange rate of currency A is fixed to a unit of currency B, then a potential problem for the central bank in charge of currency A is:

• A) running out of currency A.
• B) running out of currency B.
• C) generating excessive revenue from seigniorage.
• D) ineffective fiscal policy.

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Definitions:

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A phase of sleep characterized by non-rapid eye movements, comprising several stages of increasing depth of sleep.

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Transcendental Meditation

A form of silent mantra meditation aimed at achieving peace, relaxation, and self-development.

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A therapeutic technique that teaches individuals to control physiological processes, such as heart rate and muscle tension, through real-time feedback.