If the target exchange rate of a fixed currency is below the equilibrium exchange rate, to reach the target rate, the government should limit the ability of foreigners to buy its currency.

Question

Quizplus · Accepted Answer

By limiting the ability of foreigners to buy its currency, the government reduces the supply of the currency in the global market, thereby increasing its value and pushing its exchange rate to the target rate.

If the Target Exchange Rate of a Fixed Currency Is