lest: Exam #7 Time Remai This Question: 6 pts 19 of 20 An expansionary monetary

Question

lest: Exam #7 Time Remai This Question: 6 pts 19 of 20 An expansionary monetary policy results in lower interest rates, which in turn A reduces the international price of the dollar and increases net exports. O B. reduces the foreign demand for U.S. financial instruments and reduce net exports Ct. increases the foreign demand for U.S. financial instruments, lowering the international price of the dollar and decreasing net expo gn demand for U.S. financial instruments, raising the international price of the dollar and reducing net exports. Click to select your answer

Explanation / Answer

A. reduce the international price of the dollar and increases net exports.

Decrease in US interest rate makes foreign financial instruments more attractive and demand of US dollar decreases in the market. Decrease in price increases exports of US and decreases imports leads to increase in net exports.

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