If the Fed Conducts an Open Market Sale to Increase

question 54

Multiple Choice

If the Fed conducts an open market sale to increase domestic interest rates, what is likely to occur in the foreign exchange market?

• A)The dollar will depreciate.
• B)The dollar will appreciate.
• C)Foreign assets become more attractive.
• D)Domestic assets become less attractive.

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Definitions:

Central Tendency

A measure that represents the center point or typical value of a dataset.

Average

A statistical measure that determines the central tendency of a set of numbers by dividing the sum of all numbers by the count of the numbers.

Outliers

Those scores in a distribution that are noticeably much more extreme than the majority of scores. Whether a score is an outlier or not is usually an arbitrary decision made by the researcher.

Percentile

A measure indicating the value below which a given percentage of observations in a group of observations falls.