Which of the following statements is incorrect?
A) A foreign exchange intervention affects the value of a country's currency by changing domestic interest rates.
B) Any central bank policy that influences the domestic interest rate will affect the exchange rate.
C) Higher U.S. interest rates would likely result in an appreciation of the U.S. dollar.
D) Sterilized changes in foreign exchange reserves alter a country's monetary base.
Correct Answer:
Verified
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