試題詳解

11. Which of the following statements is correct if a country has adopted fixed exchange rate regime?
(A) If the currency is overvalued with respect to the fixed parity, the central bank has to intervene e.g. by increasing the interest rate.
(B) The central bank has to offiset the effects of capital outfow on the exchange rate e.g. by buying domestic currency and paying with foreign reserves.
(C) If, in order to reduce excess supply of the domestic currency, the central bank buys domestic currency at the target exchange rate, this will necessarily cause infation in the home country.
(D) Measures taken by the central bank to keep the exchange rate fixed will not affect the domestic interest rate.