Multiple Choice
Assume that the dollar has been consistently depreciating over a long period. The Fed decides to counteract this movement by intervening in the foreign exchange market using sterilized intervention. The Fed would:
A) buy dollars with foreign currency and simultaneously sell Treasury securities for dollars.
B) buy dollars with foreign currency and simultaneously buy Treasury securities with dollars.
C) sell dollars for foreign currency and simultaneously sell Treasury securities for dollars.
D) sell dollars for foreign currency and simultaneously buy Treasury securities with dollars.
E) None of these are correct.
Correct Answer:

Verified
Correct Answer:
Verified
Q51: A weaker dollar places _ pressure on
Q52: The Fed's indirect method of intervention is
Q53: Dollarization refers to the replacement of the
Q54: If the Fed _ interest rates when
Q55: Under a managed float exchange rate system,
Q57: The Smithsonian Agreement was an agreement to
Q58: A major advantage of the euro is
Q59: If a speculator expects that the Fed
Q60: An advantage of freely floating exchange rates
Q61: Countries that have adopted the euro must