Assume That the US Currency Is Weakening Due to a Variety

question 24

Multiple Choice

Assume that the US currency is weakening due to a variety of domestic and global economic and social factors.  Which of the following courses of action could be taken by the US central bank, the Federal Reserve, if it wants to help boost the dollar so it begins to appreciate?

• A)The Federal Reserve could buy government bonds.
• B)The Federal Reserve could sell government bonds.
• C)The Federal Reserve could sell US dollars in the foreign exchange market and buy other currencies.
• D)The Federal Reserve could buy US dollars in the foreign exchange market and sell other currency it holds.

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Definitions:

Exchange

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