Arrange the following in correct sequence with respect to exchange rate :-

(A) The central bank purchases dollars to absorb the excess supply.
(B) The exchange rate is fixed by the government higher than the market rate of exchange.
(C) The government wants to encourage exports.
(D) Supply of the dollars exceeds the demand for the dollar.

Choose the correct answer from the options given below:

(C), (B), (D), (A)

The correct answer is Option (4) → (C), (B), (D), (A)

(C) The government wants to encourage exports. Export promotion is the policy goal that motivates further actions.

(B) The exchange rate is fixed by the government higher than the market rate of exchange. To make exports cheaper and more competitive, the government fixes a higher exchange rate (i.e., more rupees per dollar).

(D) Supply of the dollars exceeds the demand for the dollar. Since the fixed rate is above the market equilibrium, more dollars are supplied than demanded.

(A) The central bank purchases dollars to absorb the excess supply. To maintain the fixed rate, the central bank intervenes and buys the excess dollars.