Under a fixed exchange rate system, the central bank of a country experiencing a balance of payments deficit will:
A) increase the supply of the domestic currency to prevent currency depreciation.
B) increase the demand for the domestic currency to prevent currency depreciation.
C) increase the supply of domestic currency to prevent a currency appreciation.
D) increase the demand for domestic currency to prevent a currency appreciation.
B
Economics
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Fill in the blank(s) with the appropriate word(s).
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Indicate whether the statement is true or false
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