The Net-Export Effect of Contractionary Monetary Policy Is

question 128

Multiple Choice

The net-export effect of contractionary monetary policy is

• A) the depreciation of the value of the dollar and a resulting increase of U.S. net exports.
• B) the depreciation of the value of the dollar and a resulting decrease of U.S. net exports.
• C) the appreciation of the value of the dollar and a resulting increase of U.S. net exports.
• D) the appreciation of the value of the dollar and a resulting decrease of U.S. net exports.

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Definitions:

Marginal Utility

The additional satisfaction or benefit gained from consuming one more unit of a good or service.

Indifference Curve

A graphical representation showing combinations of goods among which a consumer is indifferent, indicating the same level of utility or satisfaction.

Budget Line

The graphical depiction of the trade-off between two goods, demonstrating the combinations that a consumer can afford based on their income and the goods' prices.

Marginal Utility

The change in total satisfaction received from consuming one additional unit of a good or service.