Show the impact on the Federal Reserves balance sheet of a foreign-exchange market intervention where the Fed

Question:

Show the impact on the Federal Reserve’s balance sheet of a foreign-exchange market intervention where the Fed sells $1,000 worth of foreign exchange reserves. Explain what impact, if any, the intervention will have on the domestic money supply.

Balance Sheet
Balance sheet is a statement of the financial position of a business that list all the assets, liabilities, and owner’s equity and shareholder’s equity at a particular point of time. A balance sheet is also called as a “statement of financial...