To defend a pegged exchange rate that overvalues its currency, a country could
A) discourage commodity exports.
B) encourage commodity imports.
C) purchase its own currency in international markets.
D) sell its own currency in international markets.

Question

Quizplus · Accepted Answer

To defend a pegged exchange rate that overvalues its currency, a country could purchase its own currency in international markets. This action increases demand for the currency, helping to maintain its artificially high value.

To Defend a Pegged Exchange Rate That Overvalues Its Currency