If the Fed Does Not Take into Account the Additional

Multiple Choice

If the Fed does not take into account the additional policy channels available in an open economy,then ________ when conducting contractionary monetary policy.

A) it is likely to decrease GDP too much and cause a recession
B) it is likely to decrease GDP too little and inflation will persist
C) it is likely to increase GDP too much and inflation will persist
D) it is likely to increase GDP too little and cause a recession