Exchange Rates and the Balance of Payments (id: d0001edb0)

本题目来源于试卷: Exchange Rates and the Balance of Payments，类别为 IB经济学

[单选题]
A country has a fixed exc47kz7 q y*,g)pkhpop shange rate with the Un5sgjp h5a,4 jqe()wx9ub+ y;pr4rd dK pound where one unit of its currency is worth £0.9(sxa4b 5j5; p4d nrqdw,yujr+gh) p e80
£0.80. Which of the combinations of actions by the central bank would be taken if that value changed to £1?

	Own currency	UK pounds
A	Buy	Buy
B	Buy	Sell
C	Sell	Sell
D	Sell	Buy

A.
B.
C.
D.


参考答案:  D


本题详细解析:

D

$\underset{‾}{\text{Explanation}}$:
The currency has appreciated, as one unit of it can now purchase more GBP. This means the currency needs to be devalued in order to maintain the fixed exchange rate.

To devalue its currency, the country must:

• Sell the domestic currency, which increases its supply on foreign exchange markets. This eliminates choices A and B.
• Buy pounds. This causes demand for the pound to increase, causing it to appreciate against the local currency. This eliminates choice C.

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