a, Show the impact of uncertainty in the United Kingdom’s financial system on the market for dollars. What is the effect on the dollar exchange rate? b. How, in this case, could the Federal Reserve maintain a fixed exchange rate? Refer to the central bank’s role in setting interest rates in your answer.

Q: Refer to the following diagram to help you answer this question. Under fixed exchange rates, the…

A: Answer in step 2.

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A: Step 1:Step 2:

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Q: The real exchange rate is:

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