Solved by verified expert :22)
A U.S. company that wishes to sell more to other countries would favor
A)
an appreciation of the dollar.
B)
a depreciation of the dollar.
C)
neither an appreciation nor a depreciation of the dollar.
D)
higher interest rates.
Recall the Application about the possible link
between the value of the U.S. dollar and the worldwide increase in commodity
prices to answer the following question(s). Starting in the summer of 2010,
there was a rise in prices of commodities such as oil and food worldwide. Some
economists suggested that monetary policy in the United States was the cause of
the worldwide commodity boom.
23)
Recall the application. Some economists noticed that the U.S. dollar ________
largely because monetary policy in the United States had driven interest rates
________.
A)
depreciated; down
B)
depreciated; up
C)
appreciated; down
D)
appreciated; up
24)
Recall the application. Some economists noticed that the change in the value of
the U.S. dollar was largely due to the change in interest rates, and the change
in interest rates occurred because of the Fed’s use of ________ to further
stimulate the economy.
A)
open market sales
B)
quantitative easing
C)
discount operations
D)
open market purchases
25)
Recall the application. Janet L. Yellen, the Vice-Chair of the Board of
Governors, believes that ________ in worldwide demand and ________ of supply
were the primary cause of the worldwide increase in commodity prices.
A)
increases; surpluses
B)
increases; shortages
C)
decreases; surpluses
D)
decreases; shortages
26)
Recall the Application. The rise in commodity prices corresponded with ________
in interest rates, and this change in interest rates would result in bond
prices ________.
A)
an increase; falling
B)
an increase; rising
C)
a decrease; falling
D)
a decrease; rising
27)
A decrease in the money supply will tend to reduce investment.
28)
When the Fed increases the money supply, it leads to lower interest rates.
29)
Spending on consumer durables decreases as the interest rate increases.
30)
When the Fed conducts an open market sale, it leads to a higher level of
investment and output in the economy.
31)
To increase the level of output, the Fed should conduct an open market sale.
