Which of the following is a monetary policy intended to rein in inflation?
A. Raising the interest rates to increase investment spending
B. Decreasing the money supply to shift the aggregate demand curve leftward
C. Reducing interest rates to increase investment spending
D. Increasing the money supply to shift the aggregate demand curve rightward
Answer: B
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If the current account balance is negative, net interest is $100 billion and net transfer is -$100 billion, then
A) exports exceed imports. B) imports exceed exports. C) the official settlements account must be positive. D) real GDP exceeds potential GDP. E) the official settlements account must be negative.
Financial innovations can have the effect of
A) only decreasing the demand for money. B) only increasing the demand for money. C) either increasing or decreasing the demand for money depending on what the innovation is. D) increasing the Fed's monetary policy.