Assume a Central Bank Exchanges Its Currency for Other Foreign

question 14

Multiple Choice

Assume a central bank exchanges its currency for other foreign currencies in the foreign exchange market, but does not adjust for the resulting change in the money supply. This is an example of:

• A) pegged intervention.
• B) indirect intervention.
• C) nonsterilized intervention.
• D) sterilized intervention.
• E) pegged intervention AND sterilized intervention.

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