question archive If a country can achieve foreign exchange equilibrium (i

If a country can achieve foreign exchange equilibrium (i

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If a country can achieve foreign exchange equilibrium (i.e. demand for equals supply of foreign currency) without the Central Bank buying or selling foreign currencies, the country is 

  a) using a Flexible Exchange Rate system. 

  b) using a Fixed Exchange Rate system. 

  c) said to have twin deficits. 

  d) said to be using Purchasing Power Parity. 

 

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