How would the impact on the exchange rate differ if the Fed were to sell U.S. Treasury securities instead of selling an equal amount (in $ terms) of euros?
What will be an ideal response?
It wouldn't. In either case the Fed would be selling an asset other than dollars and depleting the monetary base by pulling in dollars. As the monetary base is reduced the deposit expansion multiplier would cause the money supply to decrease and interest rates to increase. As domestic interest rates increase, the demand for U.S. assets increases causing the demand for dollars to increase and the supply of dollars to decrease, (also the supply of euros will increase).
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supplement caused Armpit Homunculus. Prescott claims it had no foreknowledge of this and can take their chance at trial where they expect a $50 million payment. Just before the trial date, an internal Prescott email is discovered in which Dr. Colbert, D.F.A. is joking about "how hideous the armpits will be on all these giants.". How does this affect the likely cost of settling the case?
Voice-Beat is an earphone manufacturing firm. Suppose 900 units of earphones are demanded when the price of each unit is equal to $40 . When the price is $42 per unit, 837 units of earphones are demanded. On the basis of the given data, we can say that the price elasticity of demand of Voice-Beat earphones is: a. inelastic
b. elastic. c. perfectly inelastic. d. perfectly elastic.