Q1. If the Fed intervenes by purchasing euros with dollars, the supply of _______ will increase, and the euro will ____.

A) euros; appreciate.

B) dollars; depreciate.

C) dollars; appreciate.

D) euros; depreciate.

Q2. To weaken the dollar using sterilized intervention, the Fed will ______ U.S. dollars and simultaneously ______ Treasury securities.

A) buy; sell

B) buy; sell

C) sell; buy

D) sell; sell