If the U.S. dollar depreciates against the yen below the targeted exchange rate, the U.S. Federal Reserve has to intervene in the foreign exchange market such that:
a. the U.S. demand for yen rises.
b. the supply of U.S. dollars rises.
c. U.S. exports to Japan fall.
d. the U.S. dollar is devalued.
e. the supply of U.S. dollars falls.
Question 2
Which of the following would cause a decrease in both the price and quantity of a good exchanged?
a. A strike by production workers in the industry.
b. A subsidy to the industry from the government.
c. A decrease in advertising expenditures by the industry.
d. A decrease in the price of a complement good.
Mel Chin, Operation Paydirt/Fundred Dollar Bill Project.
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