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-In the Above Figure, Suppose the Demand for Dollars Permanently

Question 221

Multiple Choice

-In the above figure, suppose the demand for dollars permanently decreases to D<sub>2</sub>. To maintain the target, the Fed A) cannot permanently maintain the exchange rate target of 150 yen per dollar. B) must decrease the nationʹs net exports. C) can buy dollars. D) can sell dollars.
-In the above figure, suppose the demand for dollars permanently decreases to D2. To maintain the target, the Fed


A) cannot permanently maintain the exchange rate target of 150 yen per dollar.
B) must decrease the nationʹs net exports.
C) can buy dollars.
D) can sell dollars.

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