In a System of Freely Floating Exchange Rates and Perfect

Multiple Choice

In a system of freely floating exchange rates and perfect capital mobility, an increase in tariffs on foreign goods will result in

A) an increase in domestic interest rates in the short run
B) an increase in the value of the domestic currency in the short run
C) an increase in the value of the domestic currency in the long run
D) no change in domestic interest rates or income in the long run
E) all of the above