Figure 36-6 In Figure 36-6, an Expansive Monetary Policy in a Closed

question 110

Multiple Choice

Figure 36-6

In Figure 36-6, an expansive monetary policy in a closed economy results in an equilibrium at point E. In our open economy, allowing for the induced change in the currency exchange rate, the final equilibrium will be at a point like

• A) B.
• B) F.
• C) J.
• D) H.

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Definitions:

Total Cost

The sum of fixed cost and variable cost.

Extraction Cost

The expenses associated with the removal of raw materials from the earth, such as mining or drilling.

User Cost

The cost associated with the use of a service or the depletion of a capital good.

Fishery

An area with a naturally occurring population of aquatic species which can be harvested for economic purposes.