Contractionary monetary policy generally:
A. decreases the inflow of financial capital.
B. increases the inflow of financial capital.
C. decreases the U.S. exchange rate.
D. lowers U.S. interest rates.
Answer: B
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Which of the following statements is true?
A) For positive growth, consumption in an economy should always be less than savings. B) The greater the savings rate in an economy, the slower is the rate of capital accumulation. C) The greater the consumption expenditure in an economy, the faster is capital accumulation. D) Extremely high savings rate can be counterproductive for an economy in short term.
The short run is a time frame in which
A) the quantities of some factors of production are fixed and the quantities of other factors of production can be varied. B) the quantities of all factors of production can be varied. C) the quantities of all factors of production are fixed. D) all costs are sunk costs.
The proponents of fixed exchange rates argue that flexible exchange rates
A) hamper international trade because of uncertainty over what the exchange rate will be. B) force a nation to use its domestic macroeconomic policies to maintain an exchange rate. C) lead to trade protectionism. D) a and b E) a, b, and c
Economic restructuring that takes place as a result of opening to trade with other countries
A) contradicts the idea of gains from trade. B) causes some trading activity to be zero sum. C) worsens the nation's allocation of resources. D) improves the nation's allocation of resources.