Which of the following statement is incorrect? Select one: a. Most of the answer

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).

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