Question 4 4 pts Consider a standard DD-AA model under a floating exchange rate regime. A...

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Question 4 4 pts Consider a standard DD-AA model under a floating exchange rate regime. A newly-appointed central bank governor announces that the central bank will increase the amount of currency in circulation next month and cut the interest rate. Assuming that the announcement is credible and the central bank will follow through, what's the immediate effect of this announcement? O The domestic currency depreciates and output increases. O The domestic currency appreciates and output increases. O The domestic currency depreciates, but there is no change in output. Question 4 4 pts Consider a standard DD-AA model under a floating exchange rate regime. A newly-appointed central bank governor announces that the central bank will increase the amount of currency in circulation next month and cut the interest rate. Assuming that the announcement is credible and the central bank will follow through, what's the immediate effect of this announcement? O The domestic currency depreciates and output increases. O The domestic currency appreciates and output increases. O The domestic currency depreciates, but there is no change in output.

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