Author Question: To fix the foreign currency price of domestic currency below the free market equilibrium rate, a ... (Read 110 times)

drink · **on:** Jun 30, 2018

To fix the foreign currency price of domestic currency below the free market equilibrium rate, a government must:
a. sell both its own currency and foreign exchange.
b. buy its own currency and sell foreign exchange.
c. buy both its own currency and foreign exchange.
d. sell its own currency and buy foreign exchange.
e. revalue its own currency.

Question 2

If the supply of a product decreases by more than the demand increases:
a. the price will rise and the quantity traded will fall.
b. the price will rise, but the quantity traded could either rise or fall.
c. the price will fall, but the quantity traded could either rise or fall.
d. the quantity traded will rise, but the price could either rise or fall.