Considering only its direct effect on income, contractionary monetary policy tends to:
A. increase a trade deficit and increase the exchange rate.
B. decrease a trade deficit and increase the exchange rate.
C. increase a trade deficit and decrease the exchange rate.
D. decrease a trade deficit and decrease the exchange rate.
Answer: B
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Unlike Classical economists, Keynes believed that the economy could be trapped in a depression and not return to full employment without government intervention
Indicate whether the statement is true or false
Which of the following will not lead to increase in the marginal revenue product?
A. MPP increases without any changes in the price. B. Price of the product increases without any changes in MPP. C. MPP and price of the product increase. D. MPP remains the same and price of the product falls.
Refer to Scenario 1-1. Had the firm not produced and sold the last 3,000 cell phones, would its profit be higher or lower, and by how much?
A) Its profit will be $6,000 lower. B) Its profit will be $700 lower. C) Its profit will be $700 higher. D) Its profit will be $6,700 higher.
Which of the following is an important aspect of rational self-interest?
a. considering future costs b. considering past costs c. considering future causes d. considering past causes