Author Question: Net exports ________. A) are heavily determined by foreign demand for domestic goods B) are ... (Read 51 times)

bobbysung · **on:** Jun 30, 2018

Net exports ________.

A) are heavily determined by foreign demand for domestic goods
B) are heavily determined by domestic demand for domestic goods
C) are independent of domestic interest rate fluctuations
D) all of the above
E) none of the above

Question 2

Illustrate the effect of an open market sale of 20 million worth of Treasury bills on the Fed's balance sheet.

What will be an ideal response?

mariahkathleeen · **Reply #1 on:** Jun 30, 2018

Answer to Question 1

A

Answer to Question 2

The Fed's assets decline as it sells 20 million worth of securities and its liabilities decrease by 20 million due to a decline in reserve.