How does expansionary monetary policy affect net exports?
A)Expansionary monetary policy increases exports and reduces imports.
B)Expansionary monetary policy reduces exports and increases imports.
C)Expansionary monetary policy increases exports and increases imports.
D)Expansionary monetary policy reduces exports and reduces imports.

Question

Quizplus · Accepted Answer

Expansionary monetary policy makes the domestic currency cheaper, making exports more attractive and imports less attractive.

How Does Expansionary Monetary Policy Affect Net Exports