Question

If the Federal Reserve sells securities on the open market, how are the purchases of U.S. financial assets by foreigners and the international value of the dollar impacted? Financial Assets / International Value of
Dollar

A. Increase / Increase
B. Increase / Decrease
C. No Change / Decrease
D. Decrease / Decrease
E. Decrease / Increase

Answer 1

Answer:

A. Increase/Increase

Explanation:

The Federal Reserve is part of the inner economy of the country, which means that if it sells products on the open market (in the world) the inner economy will increase, in consequence the International Value of Dollar will increase because of the demand.