Suppose That the U

question 21

Multiple Choice

Suppose that the U.S. dollar depreciates in value against the South African rand and the Fed intervenes in the foreign exchange market by selling its rand holdings in exchange for dollars. To sterilize the effect of the intervention on the domestic money supply the Fed has to

• A) sell U.S. government bonds in the domestic open market.
• B) buy U.S. government bonds in the domestic open market.
• C) buy U.S. dollars in the foreign exchange market.
• D) sell South African government bonds in the international market.

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Definitions:

Oregon System

Refers to a set of political reforms in the early 20th century in Oregon, including the initiative and referendum processes, aimed at increasing public participation and reducing corruption.

Social and Economic Equality

Describes a state of society where individuals have equal access to resources, opportunities, and rights, regardless of their socio-economic background.

Electoral Reform

Changes in electoral systems to improve democratic processes, including how votes are cast, counted, and translated into seats in a legislature.

Progressive Era

A period of widespread social activism and political reform across the United States from the 1890s to the 1920s, aiming to address issues caused by industrialization, urbanization, immigration, and corruption.