What happens to the monetary base

Reference no: EM131302973

Use T-accounts to show the effect on the Fed's balance sheet of the Fed buying $2 billion in German government bonds, denominated in euros, and, at the same time, conducting an open market sale of $2 billion of U.S.

Treasury securities.

What happens to the monetary base? Is this a sterilized or an unsterilized foreign exchange intervention?

Reference no: EM131302973

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