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Author Question: Based on the figure above, which of the following factors could lead the supply curve to shift ... (Read 30 times)

melly21297

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on: Jun 29, 2018
Based on the figure above, which of the following factors could lead the supply curve to shift rightward from S0 to S2?
 
  A) a fall in foreign interest rates
  B) a fall in the U.S. interest rate
  C) a rise in the U.S. exchange rate
  D) a fall in the U.S. exchange rate
  E) a rise in expected future U.S. exchange rate

Question 2

Suppose in the money market the equilibrium nominal interest rate is 5 percent. If the Fed increases the quantity of money, what is the effect on the nominal interest rate?
 
  What will be an ideal response?


Melissahxx

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Reply #1 on: Jun 29, 2018
Answer to Question 1

B

Answer to Question 2

If the Fed increases the quantity of money, the supply of money curve shifts rightward and the nominal interest rate falls.


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