All other things being equal,an expansionary monetary policy will cause the domestic currency to appreciate.

Question

Quizplus · Accepted Answer

An expansionary monetary policy involves increasing the money supply and lowering interest rates, which can lead to a decrease in the value of the domestic currency as investors seek higher returns elsewhere. Therefore, an expansionary monetary policy is more likely to cause the domestic currency to depreciate, not appreciate.

All Other Things Being Equal,an Expansionary Monetary Policy Will Cause