Which of the following statement is incorrect? Select one: a. Most of the answer
ID: 1171477 • Letter: W
Question
Which of the following statement is incorrect?
Select one:
a. Most of the answers are correct.
b. One type of currency control measures is imposing ceilings on direct foreign investment outflows.
c. A stable exchange rate, an independent monetary policy, and capital market integration are the three goals of the economic policy makers in any country.
d. In a fixed exchange rate system, market forces of supply and demand determine exchange rates.
e. A gold standard provides price stability because gold is expensive to produce and therefore limits large amounts of production.
Explanation / Answer
In a fixed exchange rate system, the exchange rate is determined by the government and not by free market forces of supply and demand.
Hence, the option to be selected is (d).