When Faced with a Continual Excess Demand for Foreign Exchange

Multiple Choice

When faced with a continual excess demand for foreign exchange, which of the following options can the government choose to eliminate the disequilibrium situation?

A) increase the peg or devalue
B) engage in fiscal policy and raise the country's income level
C) engage in monetary policy and lower interest rates
D) increase the inflation rate
E) decrease the peg or revalue