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Macroeconomics

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Moderate

Effects of Expansionary Monetary Policy

MACRO-KBTLAE

What should be the impact of expansionary monetary policy, in the short run, on the unemployment rate, the real interest rate, the exchange value of the country's currency, and the country's net exports?

A

Unemployment rate: Increase
Real interest rate: Decrease
Exchange value of the currency: Decrease (Depreciate)
Net Exports: Increase

B

Unemployment rate: Decrease
Real interest rate: Increase
Exchange value of the currency: Increase (Appreciate)
Net Exports: Decrease

C

Unemployment rate: Increase
Real interest rate: Decrease
Exchange value of the currency: Increase (Appreciate)
Net Exports: Decrease

D

Unemployment rate: Lower
Real interest rate: Decrease
Exchange value of the currency: Increase (Appreciate)
Net Exports: Decrease