Starting from a Position Where a Nation's Money Demand Equals

question 4

Multiple Choice

Starting from a position where a nation's money demand equals the money supply and its balance of payments is in equilibrium.According to the monetary approach to the balance of payments,when the nation's central bank increases money supply,the balance of trade moves into ________ position and net official holding of foreign reserves ________.

• A) surplus; increases
• B) surplus; decreases
• C) deficit; increases
• D) deficit; decreases

---

Definitions:

Sertraline

An antidepressant medication used to treat a variety of conditions, including depression, anxiety disorders, and certain phobias.

Olanzapine

A medication primarily used to treat schizophrenia and bipolar disorder by affecting certain substances in the brain.

Lithium

A chemical element used primarily in psychiatric medication to treat mood disorders like bipolar disorder.

Mood Swings

Rapid and extreme changes in a person's emotional state, which can influence behavior and perception.