Suppose That "Fundamentals" Have Determined an Exchange Rate of 130

question 57

Multiple Choice

Suppose that "fundamentals" have determined an exchange rate of 130 yen to the dollar.If the Federal Reserve wishes to maintain an exchange rate of 120 yen to the dollar,it must meet the private excess ________ dollars in the dollar-yen market by ________.

• A)supply of,selling yen for dollars
• B)supply of,buying yen with dollars
• C)demand for,selling yen for dollars
• D)demand for,buying yen with dollars

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