In a system of perfectly flexible exchange rates, an expansionary U.S.
In a system of perfectly flexible exchange rates, an expansionary U.S. monetary policy will cause
a. a rise in the value of the dollar relative to foreign currencies.
b. a fall in the value of the dollar relative to foreign currencies.
c. no change in the value of the dollar relative to foreign currencies.
d. a change in the value of the dollar relative to foreign currencies but the direction of the change is uncertain.
ANSWER
B
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