Suppose a Central Bank Prevents a Depreciation of Its Currency

Multiple Choice

Suppose a central bank prevents a depreciation of its currency by intervening in the foreign exchange market and buying its currency with foreign currency.Other things equal, this also causes the

A) domestic money supply to decrease and a decline in aggregate demand.
B) domestic money supply to increase and a decline in aggregate demand.
C) domestic money supply to decrease and a rise in aggregate demand.
D) domestic money supply to increase and a rise in aggregate demand.