On its money supply can it offset either of these effects, Econometrics

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On its money supply can it offset either of these effects

Suppose the central bank of a small country is faced by a rise in the world interest rate. R. What is the effect on its foreign reserve holdings? On its money supply? Can it offset either of these effects through domestic open-market operations? & How might restrictions on private financial account transactions alter the problem of attaining internal and external balance with a fixed exchange rate? What costs might such restrictions involve?

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