Suppose that we observe the following change in the international market for USD: P + USD S1 D Q Suppose that the Central Bank of
Suppose that we observe the following change in the international market for USD: P + USD S1 D Q Suppose that the Central Bank of Canada wants to maintain a fixed exchanged rate at the price given in A & C. How would it go about doing so? O It would sell USD on the world market., causing the USD to depreciate. O It would buy USD on the world market, causing the USD to depreciate. O It would sell USD on the world market., causing the USD to appreciate. O It would buy USD on the world market, causing the USD to appreciate. typed answer needed
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