When the central bank allows the purchase or sale of domestic currency to have an effect on the monetary base,it is called

Question

Quizplus · Accepted Answer

An unsterilized foreign exchange intervention is when the central bank allows the purchase or sale of domestic currency to have an effect on the monetary base. In contrast, a sterilized intervention involves offsetting the effects of foreign exchange transactions on the monetary base through offsetting open market operations. The other answer choices are not accurate descriptions of this situation.

When the Central Bank Allows the Purchase or Sale of Domestic