Multiple Choice
If the Fed sells foreign assets, the monetary base will
A) fall by the amount of the sale, only if the Fed buys domestic bank deposits with the proceeds.
B) fall by the amount of the sale, only if the Fed buys domestic currency with the proceeds.
C) fall by the amount of the sale, whether the Fed buys domestic bank deposits or domestic currency with the proceeds.
D) rise by the amount of the sale.
Correct Answer:
Verified
Correct Answer:
Verified
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