A fixed exchange rate system without a band of allowed fluctuation would require the nation's monetary authorities to intervene in the foreign exchange market:
A)never
B)seldom
C)constantly
D)we cannot say

Question

Quizplus · Accepted Answer

Without a band of allowed fluctuation, the fixed exchange rate system would require the monetary authorities to constantly intervene in the foreign exchange market to maintain the fixed rate. Otherwise, any deviation from the fixed rate would harm the economy's stability and credibility.

A Fixed Exchange Rate System Without a Band of Allowed