An expansionary monetary policy results in lower interest rates, which in turn
A) reduces the international price of the dollar and increases net exports.
B) increases the foreign demand for U.S. financial instruments, lowering the international price of the dollar and decreasing net exports.
C) reduces the foreign demand for U.S. financial instruments and reduce net exports.
D) increases foreign demand for U.S. financial instruments, raising the international price of the dollar and reducing net exports.
A
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Using the liquidity preference framework, what will happen to interest rates if the Fed increases the money supply?
What will be an ideal response?
When a U.S. agribusiness company sells 10,000 units of cow vaccine to a company in France, this transaction will represent a:
A. Credit on the current account of the U.S. balance of payments B. Debit on the current account of the U.S. balance of payments C. Credit on the financial account of the U.S. balance of payments D. Debit on the financial account of the U.S. balance of payments