Given a System of Floating Exchange Rates,a Contractionary Monetary Policy

question 20

Multiple Choice

Given a system of floating exchange rates,a contractionary monetary policy by the Federal Reserve will cause

• A) the dollar to appreciate and will decrease U.S.net exports
• B) the dollar to appreciate and will increase U.S.net exports
• C) the dollar to depreciate and will increase U.S.net exports
• D) the dollar to depreciate and will decrease U.S.net exports

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Definitions:

American Businessmen

Entrepreneurs and professionals engaged in commercial, industrial, or professional activities in the United States.

Tea

A beverage made by steeping dried leaves of the tea plant (Camellia sinensis) in hot water, known for its cultural and historical significance across the world.

Opium

A narcotic obtained from the poppy plant, historically used for its analgesic and euphoric properties, and central to several historic conflicts such as the Opium Wars.

Mexican Southwest

Refers to the region of the United States that was formerly part of Mexico, including states such as California, Arizona, New Mexico, and Texas.