In order to boost the value of the euro relative to the dollar: A-The Fed should...
In order to boost the value of the euro relative to the dollar:
A-The Fed should sell dollars for euros and the ECB should buy dollar with euros.
B-The Fed should sell euros for dollars and the ECB should sell dollars for euros.
C-The Fed should sell euros for dollars and the ECB should buy euros with dollars.
D-The Fed should sell dollars for euros and the ECB should buy euros with dollars.
Homework Answers
If FED purchase the euros and also European central bank buys the Euros, EURO demand will increase and it leads to increase of euro value relative to dollar.
Hence, correct option is “D-The Fed should sell dollars for euros and the ECB should buy euros with dollars.”
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