Expansionary monetary policy is more effective in an open economy because:_______ A. Open market operations can be used to buy and sell foreign as well as domestic bonds. B. Interest rate decreases also reduce the government budget deficit, which reduces the current account deficit and increases demand. C. Interest rate decreases also reduce the value of the dollar, which increases net exports and further increases aggregate demand. D. Decreases in interest rates have an impact on foreign direct investment, encouraging the construction of factories and the purchase of stocks.
