If the Thai baht is pegged above the equilibrium exchange rate as expressed in US dollars per baht,

Question

Quizplus · Accepted Answer

If the Thai baht is pegged above the equilibrium exchange rate as expressed in US dollars per baht, it means that the baht is overvalued. This suggests that it is more expensive to buy baht with US dollars than it should be, based on market forces. As a result, it may be less attractive for investors to hold baht, and there may be less demand for it, leading to a potential surplus of baht in the market.

If the Thai Baht Is Pegged Above the Equilibrium Exchange