In a fixed exchange rate system

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In a fixed exchange rate system, how do countries address the problem of currency market pressures that threaten to lower or raise the value of their currency?

a. If demand falls, then countries must increase demand by buying up the excess supply with domestic currency.

b. If demand rises, countries must fill the excess demand for foreign currency by selling their reserves.

c. If demand rises, then countries can adjust the value of the exchange rate to the desired level.

d. A and B only.

Reference no: EM13833973

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