To temporarily offset a depreciation in the dollar's exchange value,the Federal Reserve could ____ the U.S.money supply which would promote a (an) ____ in U.S.interest rates and a (an) ____ in investment flows to the United States.
A) Increase,decrease,decrease
B) Increase,increase,increase
C) Decrease,decrease,increase
D) Decrease,increase,increase

Question

Quizplus · Accepted Answer

Decreasing the U.S. money supply would lead to an increase in U.S. interest rates, which would attract more investment flows into the United States, thereby temporarily offsetting the depreciation of the dollar's exchange value.

To Temporarily Offset a Depreciation in the Dollar's Exchange Value,the