a fixed-rate system central banks would NOT maintain currency values by
A) increasing the money supplies of nations with overvalued currencies
B) boosting the money supplies of nations with undervalued currencies
C) buying up overvalued currencies in the foreign exchange market
D) selling undervalued currencies in the foreign exchange market

Question

Quizplus · Accepted Answer

Central banks would not increase the money supply of nations with overvalued currencies because this would further devalue the currency, contrary to the goal of maintaining a fixed exchange rate.

A Fixed-Rate System Central Banks Would NOT Maintain Currency Values