Under fixed exchange rates and a _________ on the balance of payments, central bank intervention
Makes the domestic money ________ than it would otherwise have been.
A) deficit, higher
B) surplus, lower
C) surplus, higher
D) deficit, not changed

Question

Quizplus · Accepted Answer

Under a fixed exchange rate system, a surplus in the balance of payments leads to central bank intervention to buy foreign currency, increasing the domestic money supply.

Under Fixed Exchange Rates and a _________ on the Balance