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Consider the supply-demand framework for the British pound relative to the U.S. dollar shown in the following chart. The exchange rate is currently $1.80 =$1.00.
Consider the supply-demand framework for the British pound relative to the U.S. dollar shown in the following chart. The exchange rate is currently $1.80 =$1.00. Which of the following is correct? Dollar price per pound (exchange rate) S D RE D = S Multiple Choice O To "fix" the exchange rate at $1.80=$1.00. the Federal Reserve could use contractionary monetary policy to shift the demand curve to the left. O To "fix" the exchange rate at $1.80 = $1.00. the U.S. government could use contractionary fiscal policy to shift the demand curve to the left. O The British Government could use fiscal or monetary policy to shift the supply curve to the right to fix the exchange rate to $1.80 = $1.00. O all of the options
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