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The Combination of Expansionary U

Question 110

Multiple Choice

The combination of expansionary U.S. monetary policy and contractionary U.S. fiscal policy should:


A) reduce the exchange rate if prices and income do not change.
B) not affect the exchange rate if prices and income do not change.
C) raise the exchange rate if prices and income do not change.
D) have an ambiguous effect on the exchange rate if prices and income do not change.

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