If selling foreign exchange is not sterilized, then the money supply could fall.

Name: If selling foreign exchange is not sterilized, then the money supply could fall.
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Question

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When a central bank sells foreign exchange, it receives domestic currency in return, which reduces the amount of money circulating in the economy, thus potentially decreasing the money supply if the action is not sterilized through offsetting operations.

If Selling Foreign Exchange Is Not Sterilized, Then the Money