When the Fed Unexpectedly Decreases the Money Supply

Multiple Choice

When the Fed unexpectedly decreases the money supply,

A) real interest rates will rise and the foreign exchange value of the dollar will appreciate.
B) real interest rates will rise and the foreign exchange value of the dollar will depreciate.
C) real interest rates will fall and the foreign exchange value of the dollar will appreciate.
D) real interest rates will fall and the foreign exchange value of the dollar will depreciate.