What Is the Negative Side Effect on the Money Supply

question 11

Multiple Choice

What is the negative side effect on the money supply of a non-sterilized foreign exchange intervention?

• A) A higher money supply eventually leads to lower inflation, and the foreign exchange objective of the central bank's policy may conflict with its abroad goal of price stability.
• B) A higher money supply eventually leads to higher inflation, and the foreign exchange objective of the IMF's policy may conflict with its domestic goal of price stability.
• C) A higher money supply eventually leads to lower inflation, and the foreign exchange objective of the central bank's policy may conflict with its domestic goal of price stability.
• D) A higher money supply eventually leads to higher inflation, and the foreign exchange objective of the central bank's policy may conflict with its domestic goal of price stability.

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Definitions:

Nonagricultural Workers

Individuals employed in sectors other than agriculture, such as manufacturing, services, or technology.

Unions

Organizations that represent the collective interests of workers in negotiations with employers over wages, working conditions, and benefits.

Human Relations School

A management approach emphasizing social relations at work, employee well-being, and motivation.

Authoritarian Leadership

A leadership style characterized by individual control over all decisions and little input from group members.