Suppose There Was a Large Increase in Net Exports

question 12

Multiple Choice

Suppose there was a large increase in net exports. If the Fed wanted to stabilize output, it could

• A)increase the money supply, which will reduce interest rates.
• B)decrease the money supply, which will reduce interest rates.
• C)increase the money supply, which will increase interest rates.
• D)decrease the money supply, which will increase interest rates.

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Definitions:

Nicotine

A stimulant and addictive substance found in tobacco products that affects the nervous system.

Post-Traumatic Stress Disorder

A mental health condition triggered by experiencing or witnessing a traumatic event, causing lasting stress and anxiety.

Acute Stress Disorder

A reaction sometimes observed in individuals who have experienced a trauma, characterized by flashbacks and recurrent nightmares.

Dissociation

A psychological process where there is a disconnection or separation of thoughts, emotions, awareness, or identity.