The demand and supply for Fijian dollars in the foreign exchange market is:
Demand = 30,000 – 8,000e
Supply = 25,000 + 12,000e
where e is the nominal exchange rate expressed as Australian dollars per Fijian dollar. The Fijian dollar is fixed at 0.2 Australian dollars. What operation do Fijian authorities have to undertake to maintain this fixed exchange rate?

Question

The demand and supply for Fijian dollars in the foreign exchange market is: 
 Demand = 30,000 – 8,000e 
 Supply = 25,000 + 12,000e 
 where e is the nominal exchange rate expressed as Australian dollars per Fijian dollar. The Fijian dollar is fixed at 0.2 Australian dollars. What operation do Fijian authorities have to undertake to maintain this fixed exchange rate?

Answer

Fijian authorities would need to sell 1,000 Fijian dollars in foreign exchange markets.

Answer

None of the other answers are correct.

Answer

Fijian authorities would need to buy 20,000 Fijian dollars in foreign exchange markets.

Answer

Fijian authorities would need to sell 20,000 Fijian dollars in foreign exchange markets.

Answer

Fijian authorities would need to buy 1,000 Fijian dollars in foreign exchange markets.

Crowdly

The demand and supply for Fijian dollars in the foreign exchange market is: De...

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