In a Situation of Flexible Exchange Rates and Where the BP

Multiple Choice

In a situation of flexible exchange rates and where the BP curve is steeper than the LM curve,

A) monetary policy is less effective in raising national income than would be the case Under fixed exchange rates.
B) expansionary fiscal policy will be more effective in raising the level of national Income than would be the case under fixed exchange rates.
C) expansionary fiscal policy will lead to an appreciation of the country's currency.
D) the BP curve stays fixed in the same position irrespective of any shifts that occur in The IS and LM curves.