How does expansionary monetary policy affect net exports?
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a. Expansionary monetary policy reduces exports and increases imports. b. Expansionary monetary policy reduces exports and reduces imports. c. Expansionary monetary policy increases exports and increases imports. d. Expansionary monetary policy increases exports and reduces imports.
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Answer:
Quantitative Easing, which expands the money supply, generally weakens the value of the currency. A weaker currency means domestic products become cheaper, while foreign made products increaee in price. So that would increase exports, and reduce imports/.
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