An expansionary monetary policy will
a. increase imports.
b. decrease exports.
c. increase a current account deficit.
d. decrease a capital account surplus.
d
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The fact that output gaps will not last indefinitely, but will be closed by rising or falling inflation is the economy's:
A. income-expenditure multiplier. B. self-correcting property. C. short-run equilibrium property. D. long-run equilibrium property.
When a firm is regulated so it uses an average cost pricing rule, the price
A) exceeds average total cost. B) equals marginal cost. C) is less than marginal cost. D) equals average total cost. E) equals marginal revenue.
Suppose there are only two steel firms in the steel industry and their prices are equal to or very close to their ATCs. This circumstance suggests that
a. steel firms are not profit maximizing b. steel has no close substitutes c. the demand for steel is weak d. quantity supplied is less than quantity demanded at the market prices e. close substitutes are produced in other industries
Suppose there are two parallel highways between two cities with approximately equal traffic. What would you expect to happen if the state began charging tolls to drive on one of those highways?
A. Traffic would decrease on both roads. B. More drivers would drive on the non-toll road, making the toll road less congested. C. More drivers would drive on the toll road making the non-toll road less congested. D. Traffic would remain evenly divided between the two roads as drivers continuously sought the less-congested route.