-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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Definitions:

Forecasted Company Conditions

Predictive analysis regarding a company's future financial health, market position, and operational performance based on current trends and data.

Price Trends

The general direction in which the price of a good, service, or asset is moving over a specified period of time, often used to inform investment or purchasing decisions.

Reluctant

Showing hesitation or unwillingness to do something.

Hedging

A financial strategy used to reduce or limit the risk of price movements in commodities, currencies, or securities, by taking an offsetting position in a related security.