If expansionary monetary policy is used,then which of the following would be most likely to enhance the effect of the expansionary policy on aggregate demand?
A) Interest rates would increase, leading to an exchange rate appreciation and a fall in net exports.
B) Interest rates would decrease, leading to an exchange rate appreciation and a fall in net exports.
C) Interest rates would decrease, leading to an exchange rate depreciation and a rise in net exports.
D) Interest rates would increase, leading to an exchange rate depreciation and a rise in net exports.
Correct Answer:
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