Question: 1. INCREASE or DECREASE 2. INCREASING or DECREASING 3. RAISE or LOWER 7. Indirect intervention Suppose the Fed wants to weaken the dollar by using

1. INCREASE or DECREASE 2. INCREASING or DECREASING 3. RAISE or LOWER 1. INCREASE or DECREASE

2. INCREASING or DECREASING

3. RAISE or LOWER

7. Indirect intervention Suppose the Fed wants to weaken the dollar by using indirect intervention. To accomplish this goal, the Fed could warn speculators that it intends to the value of the dollar soon. Anticipating the decrease in value, holders of the dollar may try to exchange their dollars for other currency, thereby the supply of other dollars in the foreign exchange market. All else equal this would the value of the dollar relative to the other currencies

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