Which of the following statements is true?
a. Private international foreign exchange transactions affect the monetary base.
b. Both private foreign exchange transactions and central bank interventions in the foreign exchange market affect the monetary base.
c. Neither private foreign exchange transactions nor central bank interventions in the foreign exchange market affect the monetary base.
d. Central bank interventions in the foreign exchange market affect the monetary base.
.D
You might also like to view...
Some economists object to having the Fed concentrate solely on price stability because it would
A) make stabilizing the economy more difficult. B) lessen its credibility. C) privatize the Federal Reserve. D) free the Fed from political pressure.
Bank panics:
A. occur frequently in fractional reserve banking systems. B. are a risk of fractional reserve banking but are unlikely when banks are highly regulated and lend prudently. C. cannot occur in a fractional reserve banking system. D. occur more frequently when the monetary system is backed by gold.