If Contractionary Monetary Policy Is Used,which of the Following Would

question 90

Multiple Choice

If contractionary monetary policy is used,which of the following would be most likely to enhance the effect of the contractionary policy on aggregate demand?

• A) Interest rates would increase, leading to an exchange rate appreciation and a fall in net exports.
• B) Interest rates would decrease, leading to an exchange rate appreciation and a fall in net exports.
• C) Interest rates would decrease, leading to an exchange rate depreciation and a rise in net exports.
• D) Interest rates would increase, leading to an exchange rate depreciation and a rise in net exports.

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Definitions:

End

The conclusion or final point of something, where it ceases to continue.

Recognition

The ability to match a piece of information or a stimulus to a stored image or fact.

Recall

The act of retrieving information or facts from one's memory without having the information present for reference, differing in context as a duplicated term but synonymous with retrieving learned information.

Priming

The process by which exposure to a stimulus influences a response to a subsequent stimulus, without conscious guidance or intention.