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How does an expansionary monetary policy affect Aggregate Demand (AD)? A.A decline in interest rates leads to a left shift in the AD curve. B.A

How does an expansionary monetary policy affect Aggregate Demand (AD)?

A.A decline in interest rates leads to a left shift in the AD curve.

B.A decline in interest rates leads to a right shift in AD curve.

C.A rise in interest rates leads to a right shift in AD curve.

D.AD curve does not shift.

  1. Historically, the Federal Reserve (FED) typically reacted to higher inflation with .........................., and to higher unemployment with ...........................

A.an expansionary monetary policy; a contractionary monetary policy

B.an expansionary monetary policy; an expansionary monetary policy

C.a contractionary monetary policy; a contractionary monetary policy

D.a contractionary monetary policy; an expansionary monetary policy

  1. To stimulate aggregate demand, quantitative easing (QE) was used in 2008 by the FED. It involves the following:

A.the purchase of short-term government and private mortgage-backed securities.

B.the purchase of long-term government and private mortgage-backed securities.

C.the sale of long-term government and private mortgage-backed securities.

  1. In terms of total U.S. trade statistics between January and October 2020, which three countries are the top trading partners of the United States?

A.Canada, Mexico, Japan

B.China, Mexico, Japan

C.China, Mexico, Canada

  1. Brazil produces sugar with less labor and land than any other country; it therefore necessarily has:

A.an absolute advantage in sugar production

B.a comparative advantage in sugar production.

C.both a comparative and an absolute advantage in sugar production.

  1. If 113 Japanese yen purchased $1.00 U.S. in February of 2020 and 105 Japanese yen purchased $1.00 U.S. in November of 2020, then:

A.the yen depreciated against the dollar.

B.the dollar appreciated against the yen.

C.the dollar depreciated against the yen.

  1. If the U.S. dollar strengthens, which of the following parties will benefit?

A.U.S firms selling in Japan

B.Japanese firms selling in the U.S.

C.Both A and B above

D.None of the above

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