Under a fixed exchange rate regime, what would be the result if a coun

QUESTION

Under a fixed exchange rate regime, what would be the result if a country rapidly increased its money supply by printing currency?

A. It would lead to an increase in the worth of the currency.

B. The prices of imports would become more attractive in the country.

C. The country’s goods would be highly competitive in world markets.

D. Trade surplus in the country would increase.

E. It would lead to price deflation in the country.

ANSWER

B