Under a fixed exchange rate system, monetary policy can only be used to balance the supply and demand for foreign exchange.

Name: Under a fixed exchange rate system, monetary policy can only be used to balance the supply and demand for foreign exchange.
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Under a fixed exchange rate system, the central bank's primary focus is to maintain the exchange rate, which often limits its ability to use monetary policy for other purposes, such as controlling inflation or stimulating the economy.

Under a Fixed Exchange Rate System, Monetary Policy Can Only