Why Might the Federal Reserve Intervene in Foreign Currency Markets

question 228

Multiple Choice

Why might the Federal Reserve intervene in foreign currency markets?

• A) to ensure the safety of overseas investments for banks
• B) to ensure the safety of overseas investments for private investors
• C) to ensure the safety of overseas investments for pension funds
• D) to maintain a desired exchange rate for the dollar

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Definitions:

Accounting Equation

The accounting equation is a fundamental principle of accounting that represents the relationship between an entity's assets, liabilities, and equity (Assets = Liabilities + Equity).