To Maintain a Fixed Exchange Rate Via Intervention in the Markets

Multiple Choice

To maintain a fixed exchange rate via intervention in the markets, a government should:

A) be ready to crack down on illegal traders.
B) be ready to buy the home currency with foreign currency reserves when the home currency's value declines.
C) be ready to sell the home currency when the home currency's value declines.
D) be ready to borrow funds from international banks when the home currency's value declines.