Question
Suppose that over the last two years, the euro lost 30% of its value and the European Central Bank (ECB) decides to help the euro
Suppose that over the last two years, the euro lost 30% of its value and the European Central Bank (ECB) decides to help the euro regain part of its value. The ECB decides to do this through direct intervention in the market, while at the same time sterilizing the intervention. The ECB would
buy dollars and simultaneously sell Treasury securities for euros. | ||
buy dollars and simultaneously buy Treasury securities with euros. | ||
sell dollars and simultaneously buy Treasury securities with euros. | ||
sell dollars and simultaneously sell Treasury securities for euro. | ||
Raise interest rate, since this policy can quickly affect the economy. |
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