If the Fed Sells U

question 411

Multiple Choice

If the Fed sells U.S. dollars, the exchange rate

• A) does not change.
• B) falls.
• C) rises.
• D) changes, but the direction depends on whether the Fed affected the demand for dollars or the supply of dollars.

---

Definitions:

Perceptual Distortion

A cognitive bias that affects how one perceives reality, often leading to inaccuracies or misinterpretations.

Selective Attention

The process by which one focuses on certain stimuli within the environment while ignoring others, thereby allocating cognitive resources to relevant information.

Halo Effect

a type of cognitive bias where the perception of one positive quality in a person or thing influences the overall perception of that entity as positive.

Perceptual Distortion

Occurs when an individual's personal biases, prejudices, or expectations alter the way they perceive reality.