Under a fixed exchange rate regime,if a central bank must intervene to purchase the ________ currency by selling ________ assets,then,like an open market sale,this action reduces the monetary base and the money supply,causing the interest rate on domestic assets to rise.

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When a central bank intervenes under a fixed exchange rate regime to purchase the domestic currency, it sells foreign assets. This action is akin to an open market sale, reducing the monetary base and the money supply, which in turn causes the interest rate on domestic assets to rise.

Under a Fixed Exchange Rate Regime,if a Central Bank Must