Considering Only Its Direct Effect on Income, Contractionary Monetary Policy

question 41

Multiple Choice

Considering only its direct effect on income, contractionary monetary policy tends to:

• A)increase a trade deficit and decrease the exchange rate.
• B)increase a trade deficit and increase the exchange rate.
• C)decrease a trade deficit and decrease the exchange rate.
• D)decrease a trade deficit and increase the exchange rate.

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Definitions:

Notes Receivable

Written promises for amounts to be received in the future, typically with interest, classified as assets on a balance sheet.

Calculating Interest

The process of determining the amount of interest to be added to the principal sum of a loan or deposit.

Maturity Value

The amount that will be paid to the holder of a financial instrument at its maturity date, including both the principal and any final interest payments.

Issued Note

A financial instrument representing a promise to pay a specified amount of money at a future date.