Figure 19-3
-Refer to Figure 19-3.If the Thai government pegs its currency to the dollar at a value above $.03/baht,we would say the currency is

Question

Figure 19-3 
-Refer to Figure 19-3.If the Thai government pegs its currency to the dollar at a value above $.03/baht,we would say the currency is

Quizplus · Accepted Answer

If the Thai government pegs its currency to the dollar at a value above $.03/baht, it means that the Thai currency is artificially made stronger than its true value in the foreign exchange market. This will lead to an overvalued currency where it is more expensive than what it should be in a free-floating exchange rate system.

Figure 19-3 -Refer to Figure 19-3.If the Thai Government Pegs Its Currency