Under a Fixed Exchange Rate System, an Excess Demand for the Australian

Multiple Choice

Under a fixed exchange rate system, an excess demand for the Australian dollar in the FOREX market often resulted in:

A) an increase in liquidity in the financial system and a fall in interest rates.
B) a decrease in liquidity in the financial system and an increase in interest rates.
C) a decrease in liquidity in the financial system and a decrease in interest rates.
D) an increase in liquidity in the financial system and an increase in interest rates.