Suppose that Canada decides to peg its dollar ($C, or the loonie) to the U.S. dollar at an exchange rate of $C1 = $US1. What might the U.S. Federal Reserve do to offset the macroeconomic effect of the leftward shift in the U.S. IS curve?
A) It would increase the money supply.
B) It would decrease the money supply.
C) It would not change its monetary policy.
D) It would not change its fiscal policy
Answer: A) It would increase the money supply.
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What will be an ideal response?
Typically, total utility derived decreases as more of a good is consumed
a. True b. False Indicate whether the statement is true or false
Creating policy with the goal of increasing economic growth would be considered:
A. to only help if directed toward poor areas. B. to indirectly hurt efforts to eliminate poverty. C. to indirectly help eliminate poverty. D. None of these is true.
In a country with a mixed market economy, what actions may government prevent?
a. open competition among car manufacturers b. the addition of dangerous narcotics in children's cough syrup c. a reduction in fuel prices d. the bankruptcy of a small business