Suppose That the United States fiXes the Dollar-Pound Exchange Rate

question 170

Multiple Choice

Suppose that the United States fixes the dollar-pound exchange rate. In the process of maintaining the fixed exchange rate, if the U.S. central bank starts to realize reduced reserves of pounds, this
Suggests that

• A) the quantity supplied of pounds has exceeded the quantity demanded of pounds.
• B) the quantity demanded of pounds has exceeded the quantity supplied of pounds.
• C) the exchange rate will rise.
• D) the U.S. supply of dollars has increased.

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