In the IS-LM model for an open economy, an expansionary fiscal policy causes an increase in the demand for goods and the level of output and income (Y) and consequently, because of the multiplier effect an ...

• A. increase in consumption spending, an increase in the demand for money and quantity of money, a decrease in the interest rate and an increase in investment spending.
• B. increase in consumption spending, an increase in the demand for money and quantity of money, an unchanged interest rate and exchange rate.
• C. increase in consumption spending, an increase in the demand for money and quantity of money, an increase in the interest rate and an appreciation of the exchange rate.
• D. increase in consumption spending, an increase in the demand for money and quantity of money, a decrease in the interest rate and a depreciation of the exchange rate.