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Posted on Sep 08, 2024

Under a flexible exchange rate regime, if the foreign interest rate falls, A. Domestic interest rate must fall B. Domestic interest rate remains unchanged C.

Under a flexible exchange rate regime, if the foreign interest rate falls,

	A.	Domestic interest rate must fall
	B.	Domestic interest rate remains unchanged
	C.	Domestic currency must appreciate
	D.	The exchange rate (foreign$/domestic$) must fall
	E.	Both B and C

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