If the Fed were to purchase euros for dollars and at the same time sell U.S. Treasury securities in the open market, this would be an example of:

Question

Quizplus · Accepted Answer

This is a sterilized foreign exchange intervention because the Fed is offsetting the effects of their purchase of euros by selling U.S. Treasury securities in the open market, which prevents any change to the domestic monetary base.

If the Fed Were to Purchase Euros for Dollars and at the Same