If the supply of foreign exchange decreased, the central bank would have to buy foreign exchange to keep the exchange rate fixed.

Name: If the supply of foreign exchange decreased, the central bank would have to buy foreign exchange to keep the exchange rate fixed.
Brand: Quizplus
Rating: 4.7 (44 reviews)

Question

Quizplus · Accepted Answer

If the supply of foreign exchange decreases, the central bank would need to sell foreign exchange from its reserves to maintain a fixed exchange rate, not buy it.

If the Supply of Foreign Exchange Decreased, the Central Bank