Referring to Figure 19.2, the effect of an increase in U.S. interest rates is represented by a movement from point

In a competitive market free of government regulation,

A. price adjusts until quantity demanded is less than quantity supplied. B. supply adjusts to meet demand at every price. C. price adjusts until quantity demanded is greater than quantity supplied. D. price adjusts until quantity demanded equals quantity supplied.

If the central bank does not purchase foreign assets when output increases but instead holds the money stock constant, can it still keep the exchange rate fixed at ? Please explain with the aid of a figure

What will be an ideal response?