The following are hypothetical exchange rates: 2 euros = 1 pound; $1 = 2 pounds. We can conclude that ________.

________ was the main cause of weakening of the U.S. dollar between August 2007 and July 2008

A) Easing of monetary policy in the U.S. B) An increase in the expected value of the dollar C) Rising energy prices D) A surge in exports from China to the U.S.

If the Fed is facing ________, the bank lending channel provides one explanation for why monetary policy may still be effective even when short-term nominal interest rates equal 0%

A) an upward-shifting Phillips curve B) stagflation C) the zero bound constraint D) an economy where real GDP has surpassed potential GDP