A Central Bank's Attempt to Prevent an Appreciation of Its

question 115

Multiple Choice

A central bank's attempt to prevent an appreciation of its currency can stimulate domestic inflation if the ________ of its currency leads to ________ international reserves which ________ the monetary base.

• A)purchase;higher;increases
• B)purchase;lower;decreases
• C)sale;lower;decreases
• D)sale;higher;increases

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