Question: If a country has a floating exchange rate, a shift in international capital flows toward the country causes the FE curve to shift to the

If a country has a floating exchange rate, a shift in international capital flows toward the country causes the FE curve to shift to the right. As a result, the currency

Multiple Choice

depreciates and the FE and IS curves then shift to the right.

depreciates and the FE and IS curves then shift to the left.

appreciates and the FE and IS curves then shift to the right.

appreciates and the FE and IS curves then shift to the left.

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