In an attempt to maintain the peso exchange rate in 1994, the ...

[kshipps]

In an attempt to maintain the peso exchange rate in 1994, the Mexican central bank
 
  A) purchased dollars and sold pesos. B) sold both dollars and pesos.
  C) sold dollars and purchased pesos. D) purchased both dollars and pesos.

Question 2

Other things remaining the same, as the real interest rate increases,
 
  A) firms will borrow more funds.
  B) firms' demand for funds will not change.
  C) the demand for loanable funds curve shifts leftward.
  D) firms will purchase new capital with its own funds instead of taking a loan.
  E) firms will borrow less funds.

[Heffejeff]

Answer to Question 1

C

Answer to Question 2

E