When Countries Seek to Maintain Fixed Exchange Rates Through Intervention

Multiple Choice

When countries seek to maintain fixed exchange rates through intervention, their governments or central banks

A) rarely have to intervene in currency markets because the exchange rate is fixed.
B) can always rely on foreign governments or central banks to intervene in currency markets when necessary.
C) must buy domestic currency when foreign demand for their currency increases.
D) must sell domestic currency when foreign demand for their currency increases.