Suppose that the European Central Bank (ECB) has set the official value of the euro at $1.00/ and intervenes in the foreign exchange market to keep the euro at this target value. a. In order to maintain the target exchange rate, does the ECB need to buy or sell euros? How many euros must the ECB buy or sell per year, if any? (Give a numerical answer.)

b. In order to maintain the target exchange rate, does the ECB need to buy or sell dollars? How many dollars must the ECB buy or sell per year, if any? (Give a numerical answer.) c. How would a change in the ECBs official value of the euro from $1.00/ to $1.50/ affect euro-zone trade (imports and

exports)? Briefly explain.