If the Fed Were to Enter the Foreign Exchange Market

question 106

Multiple Choice

If the Fed were to enter the foreign exchange market and purchase euros, the impact on domestic banking reserves would be:

• A) the opposite of what it would be with an open market purchase.
• B) domestic banking reserves would decrease.
• C) the same as it would be with an open market purchase.
• D) uncertain.

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A type of B vitamin important for cell growth, DNA synthesis, and the prevention of certain birth defects.