Under the system of pegged exchange rates, when the domestic currency’s value presses against the top of its official price range, officials must:
A. Sell foreign currency and buy domestic currency.
B. Buy foreign currency and sell domestic currency.
C. Let the domestic currency appreciate further and refrain from intervention in the foreign exchange market.
D. Let the foreign currency appreciate further and refrain from intervention in the foreign exchange market.
Answer:B
Under the system of pegged exchange rates, when the domestic currency’s value presses against the top of its official price range, officials must:
A. Sell foreign currency and buy domestic currency. B. Buy foreign currency and sell domestic currency. C. Let the domestic currency appreciate further and refrain from intervention in the foreign exchange market. D. Let the foreign currency appreciate further and refrain from intervention in the foreign exchange market.