The Federal Reserve can influence the exchange rate by

Question

Quizplus · Accepted Answer

The Federal Reserve can influence the exchange rate by both buying or selling dollars and changing interest rates. When the Fed buys dollars, it increases the demand for the currency, which can increase its value. Conversely, when it sells dollars, it can decrease the currency's value. Additionally, changing interest rates can affect the demand for a currency. Higher interest rates can increase demand for a currency, while lower interest rates can decrease demand.

The Federal Reserve Can Influence the Exchange Rate by