Considering Only Its Direct Effect on Income, Contractionary Monetary Policy

question 111

Multiple Choice

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

• A)be ambiguous with respect to the exchange rate but decrease the trade deficit.
• B)be ambiguous with respect to the trade deficit but decrease the exchange rate.
• C)decrease the exchange rate and increase the trade deficit.
• D)increase the exchange rate and decrease the trade deficit.

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Definitions:

Legality

The state or condition of being in accordance with the law or legal requirements.

Alternative Dispute Resolution

A range of procedures, such as mediation and arbitration, used to resolve disputes without resorting to traditional court litigation.

Litigation

The process of taking legal action in a court of law to resolve disputes between parties.

Expensive

Involving a high cost or requiring considerable expenditure.