While a strong currency is a possible cure for high inflation, it may cause higher unemployment due to the attractive foreign prices that result from a strong home currency. a) True b) False If the Federal Reserve plans to weaken the dollar without affecting the dollar money supply, it should: a) exchange dollars for foreign currencies, and buy existing easury securities with dollars. b) exchange dollars for foreign currencies, and sell some of its existing Treasury security holdings for dollars. c) exchange foreign currencies for dollars, and buy existing Treasury securities with dollars. b) exchange foreign currencies for dollars, and sell some of its existing Treasury security holdings for dollars. e) None of the above When hedging, the profitability is not a big issue. a) True b) False