The diagram below shows the market for foreign exchange from the perspective of Canada.The demand for foreign exchange is
and the supply of foreign exchange varies between
and
,with an average of
.
FIGURE 34-4
-Refer to Figure 34-4.Suppose the Bank of Canada pegs the exchange rate at
and the supply curve is
.The Bank would have to ________ foreign exchange in the amount of ________ per month.
A) sell;

B) sell;

C) purchase;

D) purchase;

E) No transaction would be necessary
Correct Answer:
Verified
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