Use the Following Diagram to Answer the Following Questions

question 75

Multiple Choice

Use the following diagram to answer the following questions.

-Refer to Yen. If the United States fixes the exchange rate at 100, what action will be necessary to maintain this rate?

• A) The Federal Reserve may use any foreign currency holdings to purchase dollars.
• B) The Federal Reserve may purchase any foreign currency using its holdings of dollars.
• C) The Federal Reserve must use yen to buy dollars.
• D) The Federal Reserve must use dollars to buy yen.

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Definitions:

Communist-Allied

Being aligned or associated with Communist ideologies or entities, often in a geopolitical sense referring to nations or groups.

Ideological Confrontation

A conflict or clash between differing belief systems, values, or ideologies.

United States

A country in North America consisting of 50 states, a federal district, and several territories, known for its significant influence on global affairs.

Soviet Union

A former federal socialist state in Eastern Europe and Asia, existing from 1922 to 1991, officially known as the Union of Soviet Socialist Republics (USSR), which was composed of multiple republics.