If the Fed Wants to Depreciate the Dollar Against the Yen

question 57

Multiple Choice

If the Fed wants to depreciate the dollar against the yen, the Fed will

• A) increase the supply of dollars by buying yen.
• B) decrease the supply of dollars by selling yen.
• C) increase the supply of dollars by selling yen.
• D) increase the demand for dollars by selling yen.

---

Definitions:

GDP Deflator

A measure of the level of prices of all new, domestically produced, final goods and services in an economy, used to convert nominal GDP into real GDP.

Consumer Price Index

A benchmark capturing the average movement over time in the outlay of urban buyers for a predetermined mix of consumer goods and services.

Consumer Price Index

An index measuring the change over time in the price level of consumer goods and services purchased by households.

Base Year

A reference point in time used for comparative purposes, particularly in the context of economic and financial indices.