The Fed ________ intervene in the foreign exchange market by supplying dollars and the Fed ________ intervene in the foreign exchange market by demanding dollars.
A) can; can
B) cannot; can
C) can; cannot
D) cannot; cannot

Question

Quizplus · Accepted Answer

The Federal Reserve (Fed) has the ability to intervene in the foreign exchange market both by supplying dollars (to decrease the value of the dollar or increase the value of foreign currencies) and by demanding dollars (to increase the value of the dollar or decrease the value of foreign currencies). This is part of its monetary policy tools to influence the economy.

The Fed ________ Intervene in the Foreign Exchange Market by Supplying