Author Question: A contractionary monetary policy causes A) higher interest rates, which increases the foreign ... (Read 66 times)

mwit1967 · **on:** Jun 30, 2018

A contractionary monetary policy causes

A) higher interest rates, which increases the foreign demand for U.S. financial instruments, which causes interest rates to decrease. There is no effect on net exports.
B) higher interest rates, which decreases the foreign demand for U.S. financial instruments, raising the international price of the dollar and increasing net exports.
C) higher interest rates, which increases the international price of the dollar and decreases net exports.
D) lower interest rates, which decreases the foreign demand for U.S. financial instruments, raising the international price of the dollar and increasing net exports.

Question 2

The process in which economic growth destabilizes existing regimes and reduces the political power of rulers and monarchs is referred to as:

A) institutional destruction. B) polarization.
C) division of powers. D) political creative destruction.