Economics 0455 · IGCSE · Foreign exchange rates

Foreign exchange rates — practice question

In the diagram, D shows the demand curve for the Chinese yuan and S shows the supply curve of the Chinese yuan. The Chinese central bank wants to fix the price of the yuan at $P_1$. What action would it need to take?

  • Abuy XY yuan
  • Bbuy XZ yuan
  • Csell XY yuan
  • Dsell XZ yuan

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