5. Assume perfect capital mobility and floating exchange rates. Then ifthe central bankincreases money supply, the domestic currency will and cause the IS curve to a. Appreciate, shift to the right b. Appreciate, shift to the left c. Depreciate, shift to the right d. Depreciate, shift to the left 6. A foreign exchange intervention with an offsetting open market operation that leaves the monetary base unchanged is called a. an unsterilized foreign exchange intervention. b. a sterilized foreign exchange intervention. c. a balance-of-payment exchange rate rule. d. monetary neutrality. 7. Suppose that the Fed increases the U.S. money supply and the Bretton Woods system of fixed exchange rates is still in place. Then to maintain the fixed exchange rate, foreign central banks intervene by: a. Raising the interest rate on dollars. b. Buying dollars and selling its currency c. Raising the interest rate on its currency. d. Selling dollars and buying its currency