A decrease in the money supply causes the interest rate to rise so that investment falls

Many economists argue that the sharp reduction in U.S. net exports in the mid 1980s was due to

A) expansionary U.S. monetary policy. B) contractionary U.S. monetary policy. C) expansionary U.S. fiscal policy. D) contractionary U.S. fiscal policy.

According to the Taylor rule, the Fed will set the federal funds rate target based on which of the following?

A) an estimated long-run real interest rate B) the current deviation of the actual inflation rate from the Fed's inflation objective C) the proportionate gap between actual real GDP and a measure of potential real GDP D) all of the above