1. If reserves are scarce and interest ratesin the United States increase relative to interest rates in Europe, then the

Group of answer choices

a.demand for dollars on the foreign exchange market would increase.

b.supply of dollars on the foreign exchange market would increase.

c.dollar depreciates against the euro.

d.number of euros offered per dollar in the foreign exchange market falls.

2.In a world where reserves are scarce, the impact on the foreign exchange market for dollars resulting from the Fed selling euros in an unsterilized intervention will be

Group of answer choices

a depreciation of the dollar.

an increase in the supply of dollars.

an increase in the demand for dollars.

a decrease in the interest rate in the United States.