With Fixed Exchange Rates, Assume That the Home Currency Becomes

Multiple Choice

With fixed exchange rates, assume that the home currency becomes undervalued-that is, above its par value when expressed as the home currency price of the foreign currency.Other things equal, to maintain the fixed exchange rate the home country's central bank must

A) sell the home currency and purchase foreign currencies.
B) sell the home currency and sell foreign currencies.
C) purchase the home currency and sell foreign currencies.
D) purchase the home currency and purchase foreign currencies.