_ 24. Consider the following gure that shows the demand and supply of pounds in the private Forex market. The dollar/pound exchange rate is xed
_ 24. Consider the following gure that shows the demand and supply of pounds in the private Forex market. The dollar/pound exchange rate is xed at CM- E Sf. Suppose the economy is located at point B. If the supply of pounds shifts to S' in the private Forex: a. it implies the dollar will appreciate if the Fed does not intervene. b. the Fed will increase the supply of pounds by Qle to maintain C$,. c. it implies the pound will depreciate if the Fed does not intervene. d. the Fed will decrease the supply of pounds by Q1Q2 to maintain CM. 6. it implies the exchange rate will decline if the Fed does not intervene
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