​If the Fed Desires to Strengthen the Dollar Without Affecting

question 73

Multiple Choice

​If the Fed desires to strengthen the dollar without affecting the dollar money supply, it should:

• A) ​exchange dollars for foreign currencies, and sell some of its existing Treasury security holdings for dollars.
• B) ​exchange foreign currencies for dollars, and sell some of its existing Treasury security holdings for dollars.
• C) ​exchange dollars for foreign currencies, and buy existing Treasury securities with dollars.
• D) ​exchange foreign currencies for dollars, and buy existing Treasury securities with dollars.

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