Suppose the Currency Price of the U

question 263

Multiple Choice

Suppose the currency price of the U.S. dollar in terms of the Japanese yen starts to fall. To prevent that from occurring, the U.S. central bank should

• A) use U.S. dollars to buy Japanese goods.
• B) use yen reserves to buy U.S. dollars in the foreign exchange market.
• C) sell U.S. dollars in the foreign exchange market in exchange for yen.
• D) buy both U.S. dollars and yen in the foreign exchange market.

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