To hold the exchange rate constant,

Question content area bottom

Part 1

A.

a central bank does not intervene to remove excess supplies or demands in the foreign exchange market.

B.

a central bank cannot trade currencies at the fixed exchange rate with the private actors in the foreign exchange market.

C.

a central bank lets the foreign exchange and asset markets adjust themselves to equilibrium.

D.

a central bank must always be willing to trade currencies at the fixed exchange rate with the private actors in the foreign exchange market.