When the Fed Unexpectedly Increases the Money Supply

question 53

Multiple Choice

When the Fed unexpectedly increases the money supply,

• A)real interest rates will rise and the foreign exchange value of the dollar will appreciate.
• B)real interest rates will rise and the foreign exchange value of the dollar will depreciate.
• C)real interest rates will fall and the foreign exchange value of the dollar will appreciate.
• D)real interest rates will fall and the foreign exchange value of the dollar will depreciate.

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