At the end of 2012,the Fed was buying about $100 billion of securities per month,a much higher amount than normal.These purchases would ________ the value of the dollar on foreign exchange markets thereby ________ U.S.exports.

Question

Quizplus · Accepted Answer

When the Fed buys securities, it increases the money supply in the economy. This increase in the money supply leads to a decrease in the value of the dollar on foreign exchange markets, as there is more supply of dollars available. A lower value of the dollar makes U.S. exports cheaper and more attractive to foreign buyers, thereby increasing U.S. exports.

At the End of 2012,the Fed Was Buying About $100