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If the government of a country adopts a contractionary monetary policy, ________.

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If the government of a country adopts a contractionary monetary policy, ________.

If the government of a country adopts a contractionary monetary policy, ________.

▸ the real interest rate falls, followed by an increase in net exports and a decrease in the exchange rate

▸ the real interest rate rises, followed by an increase in net exports and a decrease in the exchange rate

▸ the real interest rate rises, followed by a decrease in net exports and an increase in the exchange rate

▸ the real interest rate falls, followed by a decrease in net exports and a decrease in the exchange rate

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Macroeconomics

Edition: 3^rd

Authors: Acemoglu, Laibson, List

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