Suppose that the Fed decides to increase the growth rate of the money supply in the United States. What is most likely to happen to the U.S. trade deficit and to GDP?

a. The trade deficit will fall; GDP will fall.
b. The trade deficit will rise; GDP will rise.
c. The trade deficit will fall; GDP will rise.
d. The trade deficit will rise; GDP will fall.

c

Economics

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Most recessions in the United States since World War II have begun with

A) a decline in residential construction. B) a rapid increase in the price level. C) a stock market crash. D) a substantial number of bank failures.

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Most economists believe that the short-run aggregate supply curve

A) slopes down. B) slopes up. C) is a vertical line. D) is a horizontal line.

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