Advocates of flexible exchange rates claim that under flexible exchange rates, a currency

A) appreciation caused by increasing the money supply would reduce unemployment by lowering the relative price of domestic products.
B) depreciation caused by increasing the money supply would increase unemployment by lowering the relative price of domestic products.
C) depreciation caused by increasing the money supply would reduce unemployment by lowering the relative price of domestic products.
D) depreciation caused by increasing the money supply would reduce unemployment by increasing the relative price of domestic products.
E) depreciation cause by decreasing the money supply would not effect unemployment, but would increase the relative price of domestic products.


C

Economics

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