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Question
Starting from a position where a countrys money demand equals the money supply and its balance of payments is in equilibrium. According to the monetary approach, an expansionary monetary policy will lead to a(n) ______ of the home currency under flexible exchange rate regime; whereas it will cause trade _______ under fixed exchange rate.
a. depreciation; deficit
b. depreciation; surplus
c. appreciation; deficit
d. appreciation; surplus
Answer
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Related questions
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