Multiple Choice
The following diagram shows the foreign exchange market for sterling. If, being worried about the effect on exports and wishing to prevent the exchange rate from rising above $1.80, the Bank of England decides to intervene by using the reserves, which of the following would have the desired effect?
A) Buying pounds using reserves of an amount a- b
B) Selling dollars to a sterling value of a- b
C) Buying dollars into the reserves by selling pounds of an amount c- d
D) Selling dollars from the reserves of an amount c- d
Correct Answer:

Verified
Correct Answer:
Verified
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