19. The demand for Australian dollars in the foreign exchange market equals 12,000–2,000e and the supply of Australian dollars in the foreign exchange market equals 3,000+3,000e, where e is the nominal exchange rate expressed in yen per Australian dollar. If the Australian dollar is fixed at 3 yen per Australian dollar, then to maintain this fixed rate, what is the required change in the Reserve Bank of Australia's holdings of yen? a. decrease by 18,000 yen b. increase by 18,000 yen c. decrease by 2,000 yen d. increase by 2,000 yen

19. The demand for Australian dollars in the foreign exchange market equals 12,000–2,000e and the supply of Australian dollars in the foreign exchange market equals 3,000+3,000e, where e is the nominal exchange rate expressed in yen per Australian dollar. If the Australian dollar is fixed at 3 yen per Australian dollar, then to maintain this fixed rate, what is the required change in the Reserve Bank of Australia's holdings of yen? a. decrease by 18,000 yen b. increase by 18,000 yen c. decrease by 2,000 yen d. increase by 2,000 yen

Exploring Economics

8th Edition

ISBN:9781544336329

Author:Robert L. Sexton

Publisher:Robert L. Sexton

Chapter29: International Finance

Section: Chapter Questions

Problem 8P

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