Which of the following is true of monetary contraction in a fixed exch

QUESTION

Which of the following is true of monetary contraction in a fixed exchange rate system?

A. It requires low interest rates.

B. It increases the demand for money.

C. It puts downward pressure on a fixed exchange rate.

D. It leads to an inflow of money from abroad.

E. It can lead to high price inflation.

ANSWER

D