Under a fixed exchange rate regime, an expansionary fiscal policy would ____ interest rates and GDP, which would cause ____ pressure on the exchange rate, forcing the monetary authority to undertake a(n) ______ monetary policy
a) raise; downward (appreciation); expansionary
b) lower; upward (depreciation); contractionary
c) raise; upward (depreciation); contractionary?
d) lower; downward (appreciation); expansionary
