If the Central Bank Employs Restrictive Monetary Policy, Which of the Following

Multiple Choice

If the central bank employs restrictive monetary policy, which of the following will be the most likely sequence of events?

A) higher real domestic interest rates, inflow of funds, appreciation of the domestic currency
B) lower real domestic interest rates, outflow of funds, appreciation of the domestic currency
C) lower real domestic interest rates, outflow of funds, depreciation of the domestic currency
D) lower inflation, lower nominal domestic interest rates, outflow of funds, depreciation of the domestic currency
E) lower inflation, lower nominal domestic interest rates, inflow of funds, depreciation of the domestic currency