Suppose That a Country Has a Current Account Surplus and the Central

Multiple Choice

Suppose that a country has a current account surplus and the central bank intervenes in the foreign exchange market and does nothing else. Which of the following statements is true in this case?

A) The surplus will get worse.
B) The exchange rate will appreciate.
C) The supply of money will rise.
D) The supply of money will fall.
E) The demand for money would fall.