Suppose the target exchange rate set by the Fed is 150 yen per dollar. If the demand for dollars permanently decreases, then the Fed
A) can permanently meet the target by selling dollars.
B) can permanently meet the target by buying dollars.
C) must violate both interest rate parity and purchasing power parity to permanently meet the target.
D) cannot permanently maintain the target rate.
D
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The_____________is the principle that suppliers will normally offer more for sale at higher prices than lower prices.
Fill in the blank(s) with the appropriate word(s).
Each of the following, except one, is a condition that characterizes a perfectly competitive labor market. Which is the exception?
a. Workers appear identical to firms. b. Workers receive wages that are above their marginal revenue product (MRP). c. There are no barriers to entering the labor market. d. There are no barriers to exiting from the labor market. e. There are many buyers of labor in the market.