Under a floating exchange rate, contractionary monetary policies are likely to increase the competitiveness of a country's exports.

Name: Under a floating exchange rate, contractionary monetary policies are likely to increase the competitiveness of a country's exports.
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Question

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Contractionary monetary policies typically lead to higher interest rates, which attract foreign capital, appreciating the domestic currency and making exports less competitive on the global market.

Under a Floating Exchange Rate, Contractionary Monetary Policies Are Likely