What Would the Fed Have Done If It Had Tried

question 71

Multiple Choice

What would the Fed have done if it had tried to keep the exchange rate at its 2001 level?

• A) buy dollars and sell euros
• B) buy dollars and buy euros
• C) sell dollars and buy euros
• D) sell dollars and sell euros
• E) None of the above are correct because the Fed cannot affect the exchange rate.

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