Under a fixed exchange rate regime,if the domestic currency is initially ________,that is ________ par,the central bank must intervene to buy the domestic currency by selling foreign assets.

Question

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Under a fixed exchange rate regime, if the domestic currency is initially overvalued, it means it is valued higher than it should be, or above par. To correct this, the central bank must intervene by buying the domestic currency and selling its foreign assets to increase the demand for the domestic currency, thereby adjusting its value.

Under a Fixed Exchange Rate Regime,if the Domestic Currency Is