Which Statement Correctly Describes How Monetary Policy Affects the Economy

question 28

Multiple Choice

Which statement correctly describes how monetary policy affects the economy?

• A) House sales are down, due to increases in the money supply.
• B) The extra money pumped into the economy by the central bank is increasing exports.
• C) The decreased supply of money is helping sell exports abroad.
• D) Businesses are investing more, now that monetary policy has attacked the inflationary gap.
• E) The extra money pumped into the economy by the central bank is reducing jobs.

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Definitions:

Glacier National Park

A national park located in the U.S. state of Montana, known for its stunning mountain ranges, glaciers, and diverse ecosystems.

Gulf Coast

The coastline along the Gulf of Mexico in the United States, known for its distinct culture, ecosystems, and economic contributions.

Upper Mantle

The layer of the Earth located beneath the crust and above the lower mantle, extending from depths of about 35 to 410 kilometers.

Continental Crust

The thick part of the Earth's crust that forms the large landmasses. It is generally older and more complex than oceanic crust.