(Solution) - Suppose that turmoil in Turkey caused nervous investors to sell -(2025 Original AI-Free Solution)

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Suppose that turmoil in Turkey caused nervous investors to sell $3.5 billion worth of Turkish-lira bonds and invest the proceeds in euro-denominated securities. Assume that at the time, Turkey's central bank maintained a fixed exchange rate between the lira and euro. Explain the effect these transactions would have on the three component of Turkey's balance of payments. ?hat effect, if any, would these transactions have on Turkey's monetary base, money supply, and M2 money multiplier?