A small island economy’s currency is permitted to move freely against the US$. The Government of the island then imposes foreign exchange controls on its citizens. What is the most likely impact on the international value of the island currency and on the US$?
- Aisland currency value falls; US$ value rises
- Bisland currency value rises; US$ value no effect
- Cisland currency value rises; US$ value rises
- Disland currency value uncertain; US$ value falls