A central bank sale of ________ to purchase ________ in the foreign exchange market results in an equal rise in its international reserves and the monetary base.

Question

Quizplus · Accepted Answer

When a central bank sells domestic currency to purchase foreign assets, it increases its international reserves and simultaneously increases the monetary base, as the domestic currency is injected into the economy.

A Central Bank Sale of ________ to Purchase ________ in the Foreign

A Central Bank Sale of to Purchase in the Foreign