If Expansionary Monetary Policy Reduces Real Interest Rates in the United

Multiple Choice

If expansionary monetary policy reduces real interest rates in the United States, which of the following is most likely to occur?

A) Net foreign investment will decline, causing the dollar to depreciate and net exports to increase.
B) Net foreign investment will decline, causing the dollar to appreciate and net exports to decrease.
C) Net foreign investment will increase, causing the dollar to appreciate and net exports to decline.
D) Net foreign investment will increase, causing the dollar to depreciate and net exports to increase.