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If Exchange Rates Are Perfectly Flexible,an Expansionary U

Question 38

Multiple Choice

If exchange rates are perfectly flexible,an expansionary U.S.monetary policy will


A) increase the supply of dollars in the foreign exchange market.
B) shift the LM curve to the right.
C) reduce the demand for dollars in the foreign exchange market.
D) reduce the value of the dollar.
E) all of the above.

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