Scenario: Gizmovia II

The Republic of Gizmovia wants to maintain the exchange rate of its currency, the gizmo, at $0.50, but the current exchange rate for the gizmo is $0.75.

(Scenario: Gizmovia II) Look at the scenario Gizmovia II. If Gizmovia uses exchange market intervention to decrease the value of its currency to $0.50, it should _____ gizmos and _____ dollars in the foreign exchange market.

sell; sell

buy; buy

buy; sell

sell; buy