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According to the Monetary Approach of the Balance of Payments

Question 35

Multiple Choice

According to the monetary approach of the balance of payments MABP,an increase in U.S.money supply growth will cause the U.S.foreign reserves :


A) to fall, as foreign central bank selling its currency and buying U.S. dollars.
B) to fall, as foreign central bank selling U.S. dollars and buying its currency.
C) to rise, as foreign central bank selling its currency and buying U.S. dollars.
D) to rise, as foreign central bank selling U.S. dollars and buying its currency.

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