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To Fix the Foreign Currency Price of Domestic Currency Below

Question 40

Multiple Choice

To fix the foreign currency price of domestic currency below the free market equilibrium rate, a government must:


A) sell both its own currency and foreign exchange.
B) buy its own currency and sell foreign exchange.
C) buy both its own currency and foreign exchange.
D) sell its own currency and buy foreign exchange.
E) revalue its own currency.

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