Economic growth is represented by a rightward shift of the long-run aggregate supply curve (LRAS)

What effect does a contractionary monetary policy in the U.S. have on the foreign trade sector?

A) The higher value of the dollar will decrease imports and increase exports. B) The higher value of the dollar will decrease exports and increase imports. C) The lower value of the dollar will decrease imports and increase exports. D) The lower value of the dollar will decrease exports and increase imports.

If the nominal interest rate is 9 percent and the real interest rate is 3 percent, then the inflation rate is

a. -6 percent. b. 3 percent. c. 6 percent. d. 12 percent.