kward3874 kward3874

04-05-2024
Social Studies

Answered

Suppose that the Fed pursues AN EXPANSIONARY monetary policy. Which of the following statements best explains the transmission mechanism in an open economy?
A . The decrease in interest rates will cause capital outflow comma lowering the value of the dollar and increasing net exports.
B . The decrease in interest rates will cause capital inflow comma lowering the value of the dollar and decreasing net exports.
C . The increase in interest rates will cause capital outflow comma increasing the value of the dollar and increasing net exports.
D . The increase in interest rates will cause capital inflow comma increasing the value of the dollar and decreasing net exports.

Answer :

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