Fill in the blanks to make the following statements correct. a. If the exchange rate is determined

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Fill in the blanks to make the following statements correct.

a. If the exchange rate is determined by the equality of supply and demand for foreign exchange and the central bank makes no foreign-exchange transactions, we say there is a(n) __________ exchange rate.

b. If the central bank buys and sells foreign exchange in an effort to maintain the exchange rate at a specific value, we say we have a(n) __________ exchange rate.

c. If the central bank pegs the exchange rate above its free-market equilibrium level, there will be a(n) __________ foreign exchange and the central bank will __________ foreign currency.

d. If the central bank pegs the exchange rate below its free-market equilibrium level, there will be a(n) __________ foreign exchange and the central bank will __________ foreign currency.

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Macroeconomics

ISBN: 9780133910445

15th Edition

Authors: Christopher T S Ragan

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