In the above figure, suppose the demand for dollars temporarily increases so that the demand curve shifts to D1. To maintain the target exchange rate, the Fed
A) can sell dollars.
B) can buy dollars.
C) must violate interest rate parity but not purchasing power parity.
D) cannot maintain the target exchange rate.
A
Economics
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Which of the following is true for taxes? They
A) are always administered fairly. B) are a necessary part of living in an economy with a fair distribution of income. C) are always administered without creating unfairness or inefficiency. D) are an involuntary transfer of private property. E) do not create a big tradeoff problem.
Economics
When the Federal Reserve buys Treasury bonds, it is called
A) a swap. B) an open market operation. C) a bond roll-over. D) bonding.
Economics