In an Open Economy Under Flexible Exchange Rates, Contractionary Monetary

question 22

Multiple Choice

In an open economy under flexible exchange rates, contractionary monetary policy in the short run will always cause:

• A) an increase in the interest rate.
• B) a decrease in output.
• C) an increase in the exchange rate.
• D) All of the above.
• E) Both B and C.

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Definitions:

Operant

Pertaining to operant conditioning, a method of learning that employs rewards and punishments for behavior, leading to changes in that behavior's frequency.

Systematic Desensitization

A therapeutic intervention aimed at reducing an individual's anxiety responses through gradual exposure to the feared object or situation, along with relaxation techniques.

Relaxation Training

A therapeutic technique designed to help individuals learn to reduce stress and anxiety through specific physical exercises and controlled breathing.

Assertiveness Training

A behavioral therapy technique designed to help individuals clearly and confidently express their needs and rights without infringing on the rights of others.