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(06.04 MC) Assume the United States is experiencing a recessionary gap and the Federal Reserve purchases government bonds. All else constant, what is the most

(06.04 MC) Assume the United States is experiencing a recessionary gap and the Federal Reserve purchases government bonds. All else constant, what is the most likely outcome? (5 points) Interest rates will rise and demand for foreign financial assets will fall, and so the dollar's exchange rate will decrease. Interest rates will rise and demand for foreign financial assets will fall, and so the dollar's exchange rate will increase. Interest rates will fall and demand for foreign financial assets will rise, and so the dollar's exchange rate will decrease. Interest rates will fall and demand for foreign financial assets will rise, and so the dollar's exchange rate will increase. Interest rates will fall and demand for foreign financial assets will rise, and so the dollar's exchange rate will remain constant

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