The buying of foreign exchange by the central bank causes the domestic money supply to fall.

Name: The buying of foreign exchange by the central bank causes the domestic money supply to fall.
Brand: Quizplus
Rating: 4.9 (32 reviews)

Question

Quizplus · Accepted Answer

The buying of foreign exchange by the central bank increases the domestic money supply because it involves paying for the foreign exchange with domestic currency, thereby injecting more of the domestic currency into the economy.

The Buying of Foreign Exchange by the Central Bank Causes