If the United States increases the interest rate in order to attract foreign currency to support the value of the dollar, then the United States is operating to maintain a _____ exchange rate.

Question

Quizplus · Accepted Answer

Increasing interest rates to attract foreign currency and support the value of the dollar indicates an intention to maintain a fixed exchange rate, where the value of the currency is pegged to another currency or a basket of currencies.

If the United States Increases the Interest Rate in Order