Leading up to Black Monday of October 1987, the concept of “inflation through the back door” referred to

a. Inflation in such as Japan and West Germany as an outcome of their central banks’ purchase of US dollars with their own currencies, thereby increasing the availability of their home currency in the banking system.

b. Inflation in such as Japan and West Germany as an outcome of their central banks raising their interest rates to assist the “soft landing”

of the dollar.

c. a and b above are both reasonable statements.

d. a but not b is a reasonable statement.