If the central bank does not purchase foreign assets when output increases but instead holds the money stock constant, can it still keep the exchange rate fixed at 
?
Please explain with the aid of a figure.
Definitions:
Early 1970s
A period that marks the beginning of the 1970s decade, often associated with significant cultural, political, and social changes worldwide.
Labor Market Segmentation
Is the division of the market for labor into distinct settings. In these settings, work is found in different ways and workers have different characteristics. There is only a slim chance of moving from one setting to another.
World War II
A global conflict that took place from 1939 to 1945, involving most of the world's nations and culminating in significant changes to global power dynamics.
Labor Homogenization
Labor homogenization refers to the process by which the workforce becomes more uniform in skill set, wages, and working conditions, often due to globalization or technological advancements.
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