Under a Fixed Exchange Rate Regime,if a Central Bank Must

question 79

Multiple Choice

Under a fixed exchange rate regime,if a central bank must intervene to purchase the ________ currency by selling ________ assets,then,like an open market sale,this action reduces the monetary base and the money supply,causing the interest rate on domestic assets to rise.

• A)domestic;foreign
• B)domestic;domestic
• C)foreign;foreign
• D)foreign;domestic

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