Consider a Country That Is Operating Under a Fixed Exchange-Rate

Multiple Choice

Consider a country that is operating under a fixed exchange-rate system.The country's balance of payments will always show total debits equal to total credits because

A) fluctuations in exchange rates will bring debits and credits into equality.
B) any official financing required to maintain the fixed exchange rate will offset any deficit or surplus in the rest of the balance of payments accounts.
C) short-term capital flows will always offset any deficit or surplus in current accounts and long-term capital accounts.
D) the official financing account will always offset a deficit or surplus in the current account.
E) fluctuations in interest rates will bring debits and credits into equality.