What is a sterilized intervention

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Alan Meltzer, an economist at Carnegie Mellon University, once argued: "I have yet to see a study that shows that sterilized intervention, the most common type of intervention used by the Fed in the foreign exchange markets, has any effect on the value of the dollar at all."

a. What is a "sterilized intervention"?

b. How would the Fed carry out a sterilized intervention in the foreign exchange market?

c. Why won't a sterilized intervention have any effect on the value of the dollar?

Reference no: EM131303888

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