Hello,

Could you please help me with the parts of the question that i have not completed? Please let me know if you notice a mistake in my answers.

Thank you

6 Chrome File Edit View History Bookmarks People Tab Window Help a d}. E t? 4.? sax-u Wed10:31l=M Q 6 EE , I Q I Lab9 [Questiontol - Lyryx Learning Inc B laeccn1.lyryx.comfstudent-servletsJLabServlet?ccid=3693 Question 10 [15 points] Draw a foreign exchange market diagram to show equilibrium with a xed exchange rate. Suppose the initial exports X is $100, the supply cunre is given by er = D.01X, and the demand curve is given by er = 2 - Cl.DtX. a) Flat the supply and demand curves of the foreign exchange market. Plot the new supply curve if the supply of US dollars declines at all levels of exports by $50. v New Supply Curve 7' 0| 2 E g\" '5 x LIJ 20 40 60 80100120140160150 E US dollars b} How does the decline in exports alfect the current account balance and conditions in the foreign exchange market when the exchange rate is xed? The decline in exports reduces the balance on current account in the balance of payments and reduces the supply at foreign exchange in the foreign exchange market. In the diagram the decline in the current account balance, measured in Canadian dollars is $ 0 . The supply curve shifts to the left New miCDmG on Chrome File Edit View History Bookmarks People Tab Window Help Get $ 7 9% Wed 10:31 PM Q Q ... Lab 9 (Question 10) ~ Lyryx Learning Inc laecon1.lyryx.com/student-servlets/LabServlet?ccid=3693 Exchange rate (155.1) SO 0.5 S1 (50.0) 20 40 60 80 100 120 140 160 180 Reset US dollars b) How does the decline in exports affect the current account balance and conditions in the foreign exchange market when the exchange rate is fixed? The decline in exports reduces the balance on current account in the balance of payments and reduces the supply of foreign exchange in the foreign exchange market. In the diagram the decline in the current account balance, measured in Canadian dollars is $ 0 . The supply curve shifts to the left c) The purchase or sale of foreign exchange reserves is required if the central bank defends the fixed exchange rate. Explain the bank's decision. To defend the fixed exchange rate at ERO the central bank (Select One) foreign exchange from the (Select One) (Select One) the difference between the market supply and demand at the fixed rate ERO. d) What are the effects on the holdings of official reserves and the monetary base? The central bank sale of US$ would (Select One) holdings of (Select One) Official Time: 22:31:47 SUBMIT AND MARK SAVE AND CLOSE JUL 22 TALK