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Basic Question 7 of 15
If a country has fixed exchange rates, the ______
B. government is committed to buying and selling currencies to maintain the fixed rate.
C. exchange rate is set by law.
A. government need not worry about the exchange rate.
B. government is committed to buying and selling currencies to maintain the fixed rate.
C. exchange rate is set by law.
User Contributed Comments 2
| User | Comment |
|---|---|
| ankurwa10 | Would Chinese RMB be considered a fixed rate vis-a-vis the USD? |
| MarcCFA | The government is committed to buy and sell at whatever rate they have to, in order to keep the exchange rate stable. Example: Yen appreciates, government needs to sell yen at the new rate, in order to get back to the old one. |
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Learning Outcome Statements
describe exchange rate regimes and explain the effects of exchange rates on countries' international trade and capital flows
CFA® 2025 Level I Curriculum, Volume 1, Module 7.