If intervention in the foreign exchange market is not _____ then the intervention could affect the domestic money supply.
A) sterilized
B) monetized
C) controlled
D) sanctioned
E) flexible

Question

Quizplus · Accepted Answer

Sterilized intervention in the foreign exchange market involves the central bank buying or selling foreign currency in exchange for their own domestic currency, and then conducting an offsetting operation to neutralize the impact on the domestic money supply. If this sterilization does not occur, the intervention could indeed affect the domestic money supply.

If Intervention in the Foreign Exchange Market Is Not _____