When exchange rates are ________, we say that the country's exchange rate is fixed.
A)determined in the market
B)set by a country's central bank
C)determined by supply and demand
D)relatively stable
E)set by a countries taxation authority

Question

Quizplus · Accepted Answer

When exchange rates are set by a country's central bank, we say that the country's exchange rate is fixed. This is because the central bank determines and maintains a specific exchange rate for its currency against other currencies. It can do this by buying or selling its own currency in the foreign exchange market to keep its exchange rate stable.

When Exchange Rates Are ________, We Say That the Country's