Everything else fundamentally remaining unchanged, the monetary approach predicts that a 5 percent cut in the money supply by the Fed will result in
A. an increase in foreign investments by the Americans.
B. an appreciation of the U.S. dollar vis-à-vis other currencies.
C. inflation in the U.S. economy.
D. a decrease in the market rate of interest in the United States.
Answer: B
Economics
You might also like to view...
Which of the following is a policy tool of the Fed? i. setting the required reserve ratios ii. conducting open market operations iii. quantitative easing
A) i only B) ii only C) iii only D) Both i and ii E) i, ii, and iii
Economics
A price floor is a legal minimum on the price at which a good or service can be sold
a. True b. False Indicate whether the statement is true or false
Economics