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.

---

Definitions:

Bank Reconciliation

A process used to verify the accuracy of bank statements with a company's financial records, identifying any discrepancies.

Checks Outstanding

Checks that have been written and recorded in the check issuer's accounting system but have not yet been cashed or cleared by the bank.

Deposit In Transit

Funds that have been sent to a bank but have not yet been processed and added to the account balance.

Note Collected

The action of receiving payment or settling a promissory note, where one party pays the amount owed to another.