If the Federal Reserve Buys $3 Billion Worth of Japanese

question 38

Multiple Choice

If the Federal Reserve buys $3 billion worth of Japanese yen,$6 billion of euros,and sells $5 billion of British pounds,how does this affect the balance of payments?

• A)Falls by $4 billion
• B)Rises by $4 billion
• C)Rises by $9 billion
• D)Falls by $5 billion

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