Over a month in late 2008, the Federal Reserve Bank reduced the interest rate by 1 percentage point. Given that the United States operates under a _________exchange rate regimes, the primary purpose of these changes was________ exchange rate of each currency.

Question

Quizplus · Accepted Answer

The United States operates under a flexible exchange rate regime, where exchange rates are determined by market forces. The primary purpose of changing interest rates is typically to influence domestic economic conditions, such as inflation and employment, rather than directly influencing exchange rates.

Over a Month in Late 2008, the Federal Reserve Bank