When the Fed reduces the money supply, it will cause a decrease in aggregate demand because:
a. real rates will rise, lowering business investment and consumer spending.
b. the dollar will depreciate on the foreign exchange market, leading to an increase in net exports.
c. lower interest rates will cause the value of assets (for example, stocks) to rise.
d. the national debt will increase, causing consumers to reduce their spending.
a
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Explain the modified version of utilitarianism proposed in the book entitled "A Theory of Justice," by the philosopher John Rawls and its relationship to the "big tradeoff."
What will be an ideal response?
Explain how product liability laws can reduce adverse selection
What will be an ideal response?
If the production of ukuleles creates a negative externality that is not corrected for by the government, the equilibrium quantity of ukuleles is
A) higher than optimal. B) lower than optimal. C) efficient. D) at a optimal level.
Both income elasticity of demand and cross-price elasticity of demand coefficients can take on negative, zero, or positive values
a. True b. False