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Suppose the Federal Reserve purchases $2 million worth of foreign assets. a) If the Federal Reserve purchases the foreign assets with $2 million in currency

Suppose the Federal Reserve purchases $2 million worth of foreign assets. a) If the Federal Reserve purchases the foreign assets with $2 million in currency from banks, show the effect of this open market operation, using T-accounts. What type of foreign exchange intervention it is and what happens to the monetary base?

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