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The demand for the Franconian franc in the foreign exchange market equals 14000-3000e and the supply of francs in the foreign exchange market equals 2000+
The demand for the Franconian franc in the foreign exchange market equals 14000-3000e and the supply of francs in the foreign exchange market equals 2000+ 2000e, where e is the nominal exchange rate expressed in Australian dollars per franc. If the franc is fixed at 2 Australian dollars per franc, then to maintain this fixed rate, Franconia's international reserves mustdollars per period.
select one:
a. decrease by 4000
b. increase by 1000
c. decrease by 2000
d. increase by 4000
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