If the Fed Sells Dollars to Purchase Yen in an Attempt

question 18

Multiple Choice

If the Fed sells dollars to purchase yen in an attempt to prop up the yen and wishes to sterilize the transaction, the change in the monetary base in the U.S. would require the Fed to

• A)use open market purchases to offset the increase in the monetary base.
• B)Use open market sales to offset the increase in the monetary base.
• C)use open market purchases to offset the decrease in the monetary base
• D)Use open market purchases to offset the increase in the monetary base.

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