If the Mexican government wants to keep the peso overvalued against the dollar,it will need to ________ in the foreign exchange market.

Question

Quizplus · Accepted Answer

To keep the peso overvalued against the dollar, the Mexican government would need to buy pesos in exchange for dollars, thereby increasing the demand for pesos and reducing the supply of dollars in the market, which would help maintain the peso's higher value.

If the Mexican Government Wants to Keep the Peso Overvalued