Suppose the U.S.dollar depreciates,and monetary authorities respond to stabilize both output and inflation.Which of the following is a correct description of the short-run consequences?
A) output,inflation,and the real interest rate have all increased
B) output,inflation,and the real interest rate have returned to their original values
C) output and inflation are higher,while the real interest rate has fallen
D) output and inflation have returned to their original values,while the real interest rate is increased
Correct Answer:
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