A-LevelEconomicsInternational economic issues9708/12 · Feb/Mar 2017 · Q241 Mark

At present, one unit of a country's currency exchanges for US1.2. The country aims to set its exchange rate equal to US1.0. Which combination of government actions in the foreign exchange market must achieve this aim?

Abuying US currency and buying its own currency

Bbuying US currency and selling its own currency

Cselling US currency and buying its own currency

Dselling US currency and selling its own currency

✓ Correct answer

B: buying US currency and selling its own currency

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Topic: International economic issues, A-Level Economics (syllabus 9708). Multiple choice, 1 mark.
Source: A-Level Economics, Feb/Mar 2017 Paper 1 Variant 2, question 24.

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