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7. Venezuela announced that its target exchange rate was 23,000 venezuelan bolivar per dollar. If the current exchange rate is 22,000 venezuelan bolivar per dollar, what should the state bank do to hit the target? A) sell USD and buy VEF. This will result in higher net exports. B)It should sell VEF and buy USD. This will result in higher net exports. C) sell VEF and buy USD. This will result in lower net exports. D)sell USD and buy VEF. This will result in lower net exports.

7. Venezuela announced that its target exchange rate was 23,000 venezuelan bolivar per dollar. If the current exchange rate is 22,000 venezuelan bolivar per dollar, what should the state bank do to hit the target? A) sell USD and buy VEF. This will result in higher net exports. B)It should sell VEF and buy USD. This will result in higher net exports. C) sell VEF and buy USD. This will result in lower net exports. D)sell USD and buy VEF. This will result in lower net exports.

Brief Principles of Macroeconomics (MindTap Course List)
Brief Principles of Macroeconomics (MindTap Course List)
8th Edition
ISBN:9781337091985
Author:N. Gregory Mankiw
Publisher:N. Gregory Mankiw
Chapter13: Open-economy Macroeconomics: Basic Concepts
Section: Chapter Questions
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7. Venezuela announced that its target exchange rate was 23,000 venezuelan bolivar per dollar. If the current exchange rate is 22,000 venezuelan bolivar per dollar, what should the state bank do to hit the target? A) sell USD and buy VEF. This will result in higher net exports. B)It should sell VEF and buy USD. This will result in higher net exports. C) sell VEF and buy USD. This will result in lower net exports. D)sell USD and buy VEF. This will result in lower net exports.
Transcribed Image Text:7. Venezuela announced that its target exchange rate was 23,000 venezuelan bolivar per dollar. If the current exchange rate is 22,000 venezuelan bolivar per dollar, what should the state bank do to hit the target? A) sell USD and buy VEF. This will result in higher net exports. B)It should sell VEF and buy USD. This will result in higher net exports. C) sell VEF and buy USD. This will result in lower net exports. D)sell USD and buy VEF. This will result in lower net exports.
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