Consider the Monetary Transmission Mechanism

question 42

Multiple Choice

Consider the monetary transmission mechanism.In an open economy,such as Canada's,a decrease in the money supply leads to a rise in the interest rate.This is followed by

• A)an outflow of financial capital and an appreciation of the Canadian dollar.
• B)an inflow of financial capital and a depreciation of the Canadian dollar.
• C)an outflow of financial capital and a depreciation of the Canadian dollar.
• D)an inflow of financial capital and an appreciation of the Canadian dollar.

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