Fixing thai baht to the us dollar

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Reference no: EM131778192

Question: Suppose Thailand is fixing its currency to the US dollar at E_B/USD = 1. Using diagrams of the money market in Thailand, money market of the USA, and the foreign exchange market explain if the following statement is TRUE or FALSE: After a decrease in the Money Supply in the US (foreign country), the central bank of Thailand has to increase its Money supply to prevent a depreciation of the Thai Baht against the US dollar.

Reference no: EM131778192

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