If the Fed sells bonds in the open market, net exports will increase.

Name: If the Fed sells bonds in the open market, net exports will increase.
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Question

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When the Fed sells bonds in the open market, it decreases the money supply, which can lead to higher interest rates. Higher interest rates can appreciate the domestic currency, making exports more expensive and imports cheaper, which could decrease net exports.

If the Fed Sells Bonds in the Open Market, Net