Which of the following describes the Federal Reserve\'s sterilization approach t

ID: 2614557 • Letter: W

Question

Which of the following describes the Federal Reserve's sterilization approach to managed float?

a. The Fed buys or sells dollars in the foreign exchange market to either strengthen or weaken the dollar

b. The Fed buys or sells dollars in the foreign exchange market and offsets the impact domestically through open market operations

c. The Fed buys or sells dollars domestically and avoids the foreign exchange market altogether

d. None of the above

Which of the following are considered to be predominant markets for the international financial system?

Select one:

a. International capital market, international crypto-currency market, and the foreign exchange market

b. International money market, international capital market, and the foreign exchange market

c. International money market, crypto-currency market, and the foreign exchange market

d. None of the above

1- Answer is B

b. The Fed buys or sells dollars in the foreign exchange market and offsets the impact domestically through open market operations

2- Answer is b

b. International money market, international capital market, and the foreign exchange market

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