When a central bank buys foreign assets,

A) its holdings of foreign assets rise by the amount of the purchase, but the monetary base is unaffected.
B) its holdings of foreign assets and the monetary base rise by the amount of the purchase.
C) its holdings of foreign assets rise by the amount of the purchase, and the monetary base rises by the amount of the purchase times the money multiplier.
D) the monetary base falls by the amount of the purchase.


B

Economics

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