Which of the Following Would NOT Be a Result of a Contractionary

question 181

Multiple Choice

Which of the following would NOT be a result of a contractionary monetary policy?

• A) Interest rates would rise.
• B) Foreign goods would become more expensive to U.S. residents.
• C) Net exports would decline.
• D) Imports would rise.

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Definitions:

Imputed Interest

Interest that the IRS assumes was paid or received on a below-market loan, even though no actual interest payments were made, to prevent tax avoidance through interest-free loans.

Below Market Interest Rate

An interest rate that is lower than the current market rate, often provided as an incentive or through a subsidy.

Taxpayer

An individual or entity that is obligated to make payments to a governmental authority based on income earned or transactions conducted.

Economically Better Off

A condition where an individual or community experiences an improvement in financial situation, often measured by increases in income, wealth, or standard of living.