If a Country with a Floating Exchange Rate Follows a Contractionary

question 405

Multiple Choice

If a country with a floating exchange rate follows a contractionary monetary policy, with everything else remaining unchanged, it leads to a(n) _____ in interest rates and a(n) _____ in the currency.

• A) increase; depreciation
• B) decrease; appreciation
• C) decrease; depreciation
• D) increase; appreciation

---

Definitions:

Ultra Prepared

Exceptionally or thoroughly prepared for a specific event or situation beyond usual expectations.

Orbital Frontal Cortex

A region of the prefrontal cortex located just above the eyes that is involved in decision-making, impulse control, and responding to rewards.

Social Context

is the immediate physical and social setting in which people live or in which something happens or develops. It includes the culture that the individual is educated or lives in, and the people and institutions with whom they interact.

Amygdala

A part of the brain involved in emotion regulation, emotional learning, and forming memories associated with emotional events.