As a Result of Contractionary Monetary Policy

question 4

Multiple Choice

As a result of contractionary monetary policy

• A) interest rates fall, the dollar depreciates, and domestic goods become cheaper, thereby reducing net exports.
• B) interest rates rise, the dollar appreciates, and domestic goods become more expensive, thereby reducing net exports.
• C) interest rates rise, the dollar appreciates, and domestic goods become cheaper, thereby reducing net exports.
• D) interest rates rise, the dollar appreciates, and domestic goods become cheaper, thereby increasing net exports.

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