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:

Proposed Project

An outlined plan or proposal for a future project, often including objectives, methodologies, and potential impacts.

Net Present Value

The disparity between the current value of cash coming in and the current value of cash going out over a time frame, utilized in capital budgeting to evaluate an investment's profitability.

Annual Benefit

The total benefit, usually measured in monetary terms, that is expected to be received annually.

Aircraft

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