If a Country Fixes the Exchange-Rate Value of Its Currency

Multiple Choice

If a country fixes the exchange-rate value of its currency, it will have to

A) follow a highly expansionary monetary policy in order to maintain the convertibility of its currency.
B) give up its monetary independence in order to maintain the convertibility of its currency.
C) fix its domestic interest rates in order to maintain the convertibility of its currency.
D) raise taxes in order to maintain the convertibility of its currency.