Question: Q1: (5points) Everything else held constant, using asset market supply and demand analysis, explain how domestic currency will be affected, if a central bank makes

Q1: (5points) Everything else held constant, using asset market supply and demand analysis, explain how domestic currency will be affected, if a central bank makes an unsterilized sale of foreign assets.

Q2: (5 pts) Using demand and supply analysis, explain whether this statement is true or false: "An open market purchase performed by the Central Bank will always lead to a lower federal funds rate."

To answer this question make sure to draw demand and supply curves in the market for reserves and clearly label all important indicators

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