The figure below shows an IS-LM-FE model for an economy with fixed exchange rates. Initially the economy is at point A, a triple intersection. Here, the FE curve is steeper than the LM curve. 
In order to maintain the fixed exchange rate, at point B monetary authorities must:
Definitions:
Reduced Wage
A wage that is decreased from a previous level, often due to economic pressures or changes in job responsibilities.
Income Effect
The alteration in a person's or economic system's earnings and the effect of this alteration on the demand for a particular product or service.
Wage Decrease
A reduction in the hourly or salaried compensation paid to workers.
Utility Maximizing
The economic principle that individuals and firms strive to achieve the highest satisfaction or benefit from their resources and choices.
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