-In the Above Figure, Suppose the Demand for Dollars Permanently

question 32

Multiple Choice

-In the above figure, suppose the demand for dollars permanently decreases to D₂. To maintain the target, the Fed

• A) can buy dollars.
• B) can sell dollars.
• C) must decrease the nation's net exports.
• D) cannot permanently maintain the exchange rate target of 150 yen per dollar.

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