A decrease in the overnight loans rate leads to all of the following except

Question

Quizplus · Accepted Answer

A decrease in the overnight loans rate will lead to a decrease in interest rates throughout the economy, which will stimulate consumption and investment. This in turn leads to an increase in the quantity of money and a fall in the exchange rate, which can boost exports. However, it is not necessarily the case that this will lead to an increase in imports.

A Decrease in the Overnight Loans Rate Leads to All