Which of the Following Is an Example of the Reasons

question 73

Multiple Choice

Which of the following is an example of the reasons that other countries have accused the U.S.of currency manipulation?

• A) The Federal Reserve increases the money supply to grow the U.S. economy.
• B) The Federal Reserve uses contractionary monetary policy to fight inflation.
• C) The Federal Reserve uses expansionary monetary policy to fight inflation.
• D) The Federal Reserve shrinks the money supply to grow the U.S. economy.

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Definitions:

Long Run

Period in which all inputs or factors of production can be varied, and all costs are variable, allowing companies to adjust to changes in market demand or production capabilities.

Average Costs

A calculation that determines the cost of producing one unit of goods by averaging the total production costs.

Returns to Scale

A concept in economics that describes how the increase in inputs affects the level of output of a production process.

Economies of Scale

The cost advantages that enterprises obtain due to their scale of operation, with costs per unit of output generally decreasing with increasing scale.