A Contractionary Monetary Policy Tends to Be More Effective Than

question 87

Multiple Choice

A contractionary monetary policy tends to be more effective than a contractionary fiscal policy at strengthening the value of the exchange rate, because a contractionary monetary policy:

• A)increases the interest rate and decreases exports, while a contractionary fiscal policy decreases both the interest rate and exports.
• B)decreases the interest rate and increases imports, while a contractionary fiscal policy increases both the interest rate and imports.
• C)increases the interest rate and decreases imports, while contractionary fiscal policy decreases both the interest rate and imports.
• D)decreases the interest rate and increases exports, while a contractionary fiscal policy increases both the interest rate and exports.

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Definitions:

Milgram Experiment

A psychological experiment conducted by Stanley Milgram in the 1960s to study obedience to authority, where participants were instructed to administer electric shocks to another person.

Stanford University Prison Experiment

A psychological study conducted by Philip Zimbardo in 1971 at Stanford University, where students were assigned roles of prisoners and guards to explore the effects of perceived power.

Generalization

Drawing a conclusion about a certain characteristic of a population based on a sample from it.

Logical Support

The provision of reasons or evidence to justify a claim or argument.