?

AP® Macroeconomics

Free Version

Upgrade subject to access all content

Moderate

Effects of Monetary Policy on International Trade and Finance

APMACR-3$SJV4

If the European Central Bank were to undertake a monetary policy designed to increase interest rates in the Eurozone, which of the following would likely be a result?

A

The international value of the euro would decrease in the foreign exchange market.

B

The Eurozone would experience an increase in foreign capital inflows and move towards a financial account surplus.

C

The Eurozone would experience an increase in net exports and move towards a current account surplus.

D

Imports would become more expensive for Europeans living in the Eurozone.

E

There would be a decrease in the supply of loanable funds in the Eurozone.