Under a fixed exchange rate regime:
A) money supply remains fixed.
B) purchases of foreign currency by the RBA will withdraw cash from the system.
C) the exchange rate is determined by supply and demand.
D) the authorities have little control over their transactions in the foreign exchange market.

Question

Quizplus · Accepted Answer

The Answer of Under a fixed exchange rate regime:
A) money supply remains fixed.
B) purchases of foreign currency by the RBA will withdraw cash from the system.
C) the exchange rate is determined by supply and demand.
D) the authorities have little control over their transactions in the foreign exchange market.

Under a Fixed Exchange Rate Regime