Question
. Assume that the dollar has been consistently depreciating over a long period. The Fed decides to counteract this movement by intervening in the foreign
. Assume that the dollar has been consistently depreciating over a long period. The Fed decides to counteract this movement by intervening in the foreign exchange market using sterilized intervention. The Fed would
a. | buy dollars with foreign currency and simultaneously sell Treasury securities for dollars. |
b. | buy dollars with foreign currency and simultaneously buy Treasury securities with dollars. |
c. | sell dollars for foreign currency and simultaneously sell Treasury securities for dollars. |
d. | sell dollars for foreign currency and simultaneously buy Treasury securities with dollars. |
e. | none of the above |
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