Which of the Following Statements Is Not True of Fixed

Multiple Choice

Which of the following statements is not true of fixed and flexible exchange rate systems?

A) Under fixed exchange rates, government officials have little direct role in the foreign exchange market.
B) Under fixed exchange rates, the government must select an appropriate exchange rate.
C) Under fixed exchange rates, active central bank intervention is necessary to maintain the fixed exchange rate.
D) Under fixed exchange rates, the governments must stand ready to buy all foreign exchange offered to it and supply all foreign exchange demanded from it.
E) Flexible exchange rates rely on market forces to set the exchange rate, but fixed exchange rates are set by central banks.