If the US Treasury engages in a foreign exchange intervention to increase the value of the dollar relative to the yuan renminbi by having the Federal Reserve buy dollars and sell yuan renminbi in the foreign market, how will this affect the monetary base?
A) There will be no impact on the monetary base.
B) The monetary base will increase.
C) The monetary base will decline.
D) The composition of the monetary base will change with no impact on the overall size of the monetary base.
Correct Answer:
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