If the Fed sells government securities,other interest rates ________ and then exchange rate ________.
A)rise;does not change
B)fall;falls
C)do not change;rises
D)rise;falls
E)rise;rises

Question

Quizplus · Accepted Answer

When the Fed sells government securities, it reduces the money supply, leading to higher interest rates. Higher interest rates attract foreign capital, increasing demand for the domestic currency and causing the exchange rate to rise.

If the Fed Sells Government Securities,other Interest Rates ________ and Then