Suppose That the Fed Decides to Decrease the Growth Rate

question 93

Multiple Choice

Suppose that the Fed decides to decrease the growth rate of the money supply in the United States.What is most likely to happen to the U.S.trade deficit and to GDP?

• A)The trade deficit will fall; GDP will fall.
• B)The trade deficit will rise; GDP will rise.
• C)The trade deficit will fall; GDP will rise.
• D)The trade deficit will rise; GDP will fall.

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Definitions:

Invoice

A document issued by a seller to a buyer, specifying the items or services sold, prices, terms of sale, and payment instructions.

Payment

The act of providing money in exchange for goods, services, or to satisfy a debt.

Credited

Recognized or accounted for in financial transactions; often involves adding a sum to an account balance.

Account

A record or statement of financial expenditure and receipts, related to a specific period or purpose, or a contractual arrangement through which an individual or entity receives financial or banking services.