2) Which of the following occurs when the FEDundertakes policies which increase

Question

2) Which of the following occurs when the FEDundertakes policies which increase interest rates in the UnitedStates?

3) Suppose that monetary policy in the UnitedStates leads to an increase in interest rates relative to those inJapan. Which of the following will occur in the capitalaccount?

4) Restrictive monetary policy by the Fedshould lead to:

5) An expansionary monetary policy by the Fedwould tend to:

6) An expansionary monetary policy by the Fedwould be expected to:

7) If the dollar is depreciating more thandesired, an appropriate policy by the Federal Reserve Board tosupport the value of the dollar would be:

Explanation / Answer

To save time, I will use a,b,c and d 1 c 2 I don't know, but I would guess that the demand goes downand the supply up. If the interest rate increases it would be moreexpensive for me to borrow so I would borrow less and I would gethigher interest in my bank so I would deposit more. But I am onthin ice. 3 b 4 c 5 c, but lower the value of the dollar. I'm no expert, but are notFED gonna lower the interest rate? which means higher inflation,lower the value of the dollar which means cheaper export and moreexpensive imports? 6 a 7 b

Related Questions

Navigate

• Browse (All)
• Browse 2
• Subjects

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.