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Answer the followingSuppose it is the late 1970s, and the rate of price inflation is 12 percent. The Fed chairman, Paul Volker, seeks to permanenSuppose the exchange rate for U.S. dollars and euros is approximately $1.00 = €0.80, as shown in the market for U.S. dollarsQuestion 19 (1 point) On June 1, 2016, the exchange rate for U.S. dollars and euros was approximately $1.00 = €0.90, as shownQuestion 20 (1 point) During President Donald Trumps first 100 days as President, he said he prefers a low interest rate poThe Central American country of Belize is one of approximately 14 Caribbean community countries that pegs its currency to the

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Answer #1

1. In order to reduce inflation, the fed need to tighten its its monetary policy which can be achieved by "Selling Treasuries.

So, A

2. Increase in interest rates would raise the demand for US Dollar. So, demand curve would shift rightwards and supply curve to the left.

So option C

3. Inverse happens with reference to the above case, supply of dollar rises and demand falls.

So, Option B

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