A fixed exchange rate is an exchange rate whose value:
A. is set by official government policy.
B. varies according to supply and demand for the currency in the foreign exchange market.
C. reflects the comparative advantage of the home country versus other foreign countries.
D. is established annually by the International Monetary Fund.
Answer: A
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Monetary policy refers to the actions taken by the Treasury Department to set the level of the money supply
Indicate whether the statement is true or false
Which of the following is true? a. The private market provides too much of goods that generate external benefits
b. In the case of external benefits, if we could add the benefits that are derived by non-paying consumers, the supply curve would shift to the right, increasing output. c. In the case of external benefits, a tax equal to external benefits would result in an efficient level of output. d. In the case of public goods, when people act as free-riders, some goods having benefits greater than costs will not be produced.