Suppose the U.S. economy is going into a recession. Considering the effect of monetary policy on trade through its impact on income only, the domestic problem calls for:
A. contractionary monetary policy, which will decrease the U.S. trade deficit.
B. expansionary monetary policy, which will increase the U.S. trade deficit.
C. expansionary monetary policy, which will decrease the U.S. trade deficit.
D. contractionary monetary policy, which will increase the U.S. trade deficit.
Answer: B
You might also like to view...
An economy with an expansionary gap will, in the absence of stabilization policy, eventually experience a(n) ________ in the inflation rate, leading to a(n) ________ in output.
A. decrease; increase B. increase; increase C. decrease; decrease D. increase; decrease
If today the exchange rate is 1.00 euro per dollar and tomorrow the exchange rate is 0.98 euros per dollar, then the dollar ________ and the euro ________
A) depreciated; appreciated B) appreciated; depreciated C) depreciated; did not change D) appreciated; appreciated E) depreciated; depreciated
The long-run social benefits of infant industry protection are more likely to be realized if
(a) investors believe that tariff barriers are permanent. (b) investors believe that tariff barriers are transitory. (c) tariff barriers increase over time. (d) tariff barriers are replaced with quotas over time.
The Clayton Act of 1914 allowed a person who successfully sued a company for damages caused by an illegal arrangement to restrain trade to recover __________ damages
Fill in the blank(s) with correct word