Which of the Following Is a Good Example of the Net

question 21

Multiple Choice

Which of the following is a good example of the net export or open economy effect of monetary policy?

• A) An expansionary monetary policy causes net exports to rise, which helps to decrease unemployment.
• B) An expansionary monetary policy causes net exports to fall, which helps to decrease inflationary pressures.
• C) A contractionary monetary policy causes net exports to rise, which helps to decrease inflationary pressures.
• D) A contractionary monetary policy causes net exports to fall, which helps to reduce unemployment.

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Definitions:

Confounding Variable

A variable that influences both the dependent variable and independent variable causing a spurious association.

Cause-and-effect Relationship

A connection between two events where one is the result of the other or occurring as a direct consequence.

Operational Definition

A clear, precise description of a variable in terms of the procedures used to measure or manipulate it.

Theory

A systematic set of ideas intended to explain phenomena, based on general principles independent of the thing to be explained.