The direct impact of contractionary monetary policy is to:
A. lower U.S. income, reduce U.S. imports, and lower the value of the dollar.
B. raise U.S. income, increase U.S. imports, and raise the value of the dollar.
C. raise U.S. income, increase U.S. imports, and lower the value of the dollar.
D. lower U.S. income, reduce U.S. imports, and raise the value of the dollar.
Answer: D
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Assume a simplified banking system subject to a 20 percent required reserve ratio. If there is an initial increase in excess reserves of $100,000 . the money supply:
a. increases $100,000 b. increases $500,000. c. increases $600,000 d. decreases $500,000.
The supply-demand mechanism will bring an international market into equilibrium
a. at a price below the domestic price. b. where domestic supplies are less than domestic demand. c. with one nation's price higher than the other nation's price. d. when the quantity demanded for exports is equal to quantity supplied.