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Question
With flexible exchange rates, a decrease in money supply by a central bank causes the domestic interest rate to _______ , official settlements _______, and the domestic currency to _______. As a result, the IS curve will shift to bring the domestic interest rate to be equal to foreign interest rates.
a. fall; deficit; depreciate
b. rise; deficit; depreciate
c. rise; surplus; appreciate
d. fall; surplus; appreciate
Answer
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Related questions
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