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1. Foreign exchange market intervention Suppose the Fed wants the dollar to appreciate. The Fed hopes to accomplish this goal by using $19 billion in U.S. currency in a foreign exchange market intervention. In order to cause the dollar to appreciate, the Fed will need to their currency reserves of another country. $19 billion in the foreign exchange market, while also rureign exchange intervention, and would have an expansionaryy effect on the a sterilized a contractionary Use the following table to show the changes in the balance sheet of the Fed. This intervention would be classified as an unsterlized, money supply. Suppose the Fed wants the dollar to appreciate, but also wants the domestic money supply to remain unchanged. Buy, In addition to the foreign-exchange market intervention you just outlined, the Fed will also need to the monetary base so that it remains unchanged. This intervention would be classified as increasting intervention since the net result would be no change in the domestic money supply. government securities, thereby foreign exchange a IC