Sterilization Is

question 16

Multiple Choice

Sterilization is

• A)the process whereby the full amount of the foreign exchange transaction by the central bank is offset by an open market operation so that the monetary base is increased.
• B)the process whereby the full amount of the foreign exchange transaction by the central bank is offset by an open market operation so that the monetary base is unaffected.
• C)the process whereby the full amount of the foreign exchange transaction by the central bank is offset by an open market operation so that the monetary base is decreased.
• D)the process whereby the full amount of the foreign exchange transaction by the central bank is offset by an open market operation so that the fed funds rate target increases to counteract it.

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Definitions:

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