Which of the following statements is incorrect?
A. Any central bank policy that influences the domestic interest rate will affect the exchange rate.
B. A foreign exchange intervention affects the value of a country's currency by changing domestic interest rates.
C. Higher U.S. interest rates would likely result in an appreciation of the U.S. dollar.
D. Sterilized changes in foreign exchange reserves alter a country's monetary base.
Answer: D
Economics
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