If the Federal Reserve in the United States begins to purchase foreign currency and pay for these purchases with dollars, this should cause:

Question

Quizplus · Accepted Answer

When the Federal Reserve purchases foreign currency and pays for it with dollars, the supply of dollars in the market increases, leading to a depreciation of the dollar's value. This, in turn, makes imports more expensive and exports more attractive, potentially increasing export volumes.

If the Federal Reserve in the United States Begins to Purchase