An unsterilized intervention in which a central bank sells domestic currency to buy foreign assets will lead to:
A) an increase in foreign reserves
B) a decrease in domestic money supply
C) an appreciation of domestic currency
D) All of the above are correct.

Question

Quizplus · Accepted Answer

When a central bank sells domestic currency to buy foreign assets, it increases its foreign reserves.

An Unsterilized Intervention in Which a Central Bank Sells Domestic