Author Question: In 2008, Germany passed a stimulus package of 29 billion as its economy slowed. This policy action ... (Read 56 times)

cnetterville · **on:** Jun 29, 2018

In 2008, Germany passed a stimulus package of 29 billion as its economy slowed. This policy action follows the ________ to restore full employment.

A) Keynesian viewpoint that supports increases in federal government expenditure
B) Keynesian viewpoint that supports increases in the money supply
C) monetarist viewpoint that supports increases in expenditure by the federal government
D) new classical viewpoint that discourages the use of expenditure by the federal government

Question 2

In the foreign exchange market, how does each of the following influences affect the demand for dollars and the demand curve for dollars?

a) an increase in the exchange rate.
b) an increase in the U.S. interest rate.
c) a fall in the expected future exchange rate.

Missbam101 · **Reply #1 on:** Jun 29, 2018

Answer to Question 1

A

Answer to Question 2

a) The increase in the exchange rate decreases the quantity of dollars demanded and creates an upward movement along the demand curve for dollars.
b) An increase in the U.S. interest rate increases the demand for dollars and shifts the demand curve for dollars rightward.
c) A fall in the expected future exchange rate decreases the demand for dollars and shifts the demand curve for dollars leftward.