Hello, could you please help me with this question?
for clarification:
b) ....measured in Canadian dollars is $???.
c)...The central bank BUYS/SELLS foreign exchange from the OFFICIAL RESERVES/MONETARY BASE; EQUAL TO/LESS THAN/GREATER THAN the difference between the market supply and demand...
d) the central bank sale of US$ would REDUCE/INCREASE holdings of OFFICIAL RESERVES BUT NOT MONETARY BASE/MONETARY BASE BUT NOT OFFICIAL RESERVES/BOTH OFFICIAL RESERVES AND THE MONETARY BASE.
Thank you for your help
Chrome File Edit View History Bookmarks People Tab Window Help Get $ 7 85% Fri 12:39 AM Q QE .. . Lab 9 (Question 10) ~ Lyryx Learning Inc laecon1.lyryx.com/student-servlets/LabServlet?ccid=3693 Question 10 [15 points] Draw a foreign exchange market diagram to show equilibrium with a fixed exchange rate. Suppose the initial exports X is $100, the supply curve is given by er = 0.01X, and the demand curve is given by er = 2 - 0.01X. a) Plot 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. New Supply Curve Exchange rate (155.1) SO S1 0.5- (50,0) 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 el The purchase or sale of foreign avchange reserves is required if the central hank defends the fived avehanna rate Evolain the hank's daricion JUL 24 TALK i laecon1. lyryx.comlstudent-servletsJLabServlet?ccid=3 6 9 3 7' 01 Exchange rate 0.5 20 40 60 80100120140160180 i US dollars b) How does the decline in exports affect the current account balance and conditions in lhe foreign exchange market when the exchange rate is xed? The decline in exports reduces the balance on current account in lhe 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 xed exchange rate. Explain the bank's decision. To defend the xed 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 xed rate ERD. d) What are the effects on the holdings of ofcial reserves and the monetary base? The central bank sale of US$ would Select One) holdings of (Select One)
