Suppose That the Fed Decides to Decrease the Growth Rate

question 93

Multiple Choice

Suppose that the Fed decides to decrease the growth rate of the money supply in the United States.What is most likely to happen to the U.S.trade deficit and to GDP?

• A)The trade deficit will fall; GDP will fall.
• B)The trade deficit will rise; GDP will rise.
• C)The trade deficit will fall; GDP will rise.
• D)The trade deficit will rise; GDP will fall.

---

Definitions:

Circadian Rhythms

Biological processes that occur on a roughly 24-hour cycle, influencing patterns such as sleep-wake cycles and hormone release.

Antidiuretic Hormone

A hormone that helps to control the balance of water in the body by reducing the amount of urine produced by the kidneys.

Posterior Pituitary

The rear part of the pituitary gland that stores and releases hormones like antidiuretic hormone (ADH) and oxytocin, received from the hypothalamus.

Oxytocin

A hormone that plays a role in social bonding, sexual reproduction, childbirth, and the period after childbirth.