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When Countries Seek to Maintain Fixed Exchange Rates Through Intervention

Question 217

Multiple Choice

When countries seek to maintain fixed exchange rates through intervention, their governments or central banks:


A) never have to intervene in currency markets because the exchange rate is fixed.
B) may have to stop printing domestic currency.
C) must buy domestic currency when foreign demand for it increases.
D) must sell domestic currency when foreign demand for it increases.

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