If restrictive monetary policy results in a slowdown in the domestic inflation rate and higher real interest rates, other things constant, the

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When a nation implements a restrictive monetary policy, it can cause a slowdown in the domestic inflation rate and higher real interest rates. These actions can make the domestic currency more attractive to foreign investors due to the higher interest rates. As a result, the demand for the domestic currency increases, causing it to appreciate.

If Restrictive Monetary Policy Results in a Slowdown in the Domestic