Economics 9708 · AS & A Level · 6.4

6.4 — practice question

Currently, 1 unit of a country’s currency is worth US$1.20. The country wants to fix its exchange rate at US$1.00. Which mix of government measures in the foreign exchange market must be used to achieve this aim?

  • Abuying US currency and buying its own currency
  • Bbuying US currency and selling its own currency
  • Cselling US currency and buying its own currency
  • Dselling US currency and selling its own currency

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