-In the above figure, suppose the demand for dollars permanently decreases to D₂. To maintain the target, the Reserve Bank A)must decrease the nation's net exports. B)can buy dollars. C)can sell dollars. D)The Reserve Bank cannot permanently maintain the exchange rate target of 150 yen per dollar.

Question

Quizplus · Accepted Answer

The Reserve Bank cannot permanently maintain the exchange rate target of 150 yen per dollar because the demand for dollars has permanently decreased.

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