The following figure shows the equilibrium in the foreign exchange market where dollars are exchanged for yuan.
-Refer to the figure above.If the government of China wants to keep the exchange rate below E yuan per dollar,________.
A) it will have to sell both dollars and yuan
B) it will have to buy both dollars and yuan
C) it will have to buy dollars and sell yuan
D) it will have to buy yuan and sell dollars
Correct Answer:
Verified
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