Multiple Choice
In a small open economy with a flexible exchange rate, a monetary injection by the Bank of Canada causes which of the following?
A) It causes the dollar to appreciate.
B) It causes net exports to fall.
C) It causes an additional decrease in demand for Canadian-produced goods and services that is not realized in a closed economy.
D) It causes a shift of the aggregate demand curve farther to the right than it would in a closed economy.
Correct Answer:
Verified
Correct Answer:
Verified
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