Asked by Mason Rogers on Jun 19, 2024
Verified
A tight monetary policy does all of the following,except
A) raise interest rates.
B) drive up the dollar relative to foreign currencies.
C) raise net exports.
D) increase imports.
Tight Monetary Policy
A monetary policy strategy used by central banks to decrease the money supply and increase interest rates to control inflation and stabilize the currency.
Net Exports
The value of a country's total exports minus the value of its total imports. It is a component of a country’s GDP.
- Determine the elements that affect the efficiency of monetary policy during times of economic downturn.
Verified Answer
AV
Ankit VermaJun 26, 2024
Final Answer :
C
Explanation :
A tight monetary policy typically involves raising interest rates to control inflation, which can lead to a stronger domestic currency (making imports cheaper and exports more expensive) and thus, contrary to option C, would likely decrease net exports rather than increase them.
Learning Objectives
- Determine the elements that affect the efficiency of monetary policy during times of economic downturn.
Related questions
The Growth Primary Growth Stimulus Provided to the Economy Through ...
The Longest and Least Predictable Lag Affecting the Effectiveness of ...
President Barack Obama and Congress Cut Taxes and Raised Government ...
Why Might Government Expenditures Be More Appropriate Than Tax Cuts ...
According to the Classical Economists,if the Quantity of Money That ...