A Contractionary Monetary Policy Would Be More Effective If It

Multiple Choice

A contractionary monetary policy would be more effective if it caused:

A) interest rates to increase, leading to an exchange rate appreciation and a fall in net exports.
B) interest rates to decrease, leading to an exchange rate appreciation and a fall in net exports.
C) interest rates to decrease, leading to an exchange rate depreciation and a rise in net exports.
D) interest rates to increase, leading to an exchange rate depreciation and a rise in net exports.