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An expansionary monetary policy increases net exports by interest rates and the value of the dollar

An expansionary monetary policy increases net exports by ________ interest rates and ________ the value of the dollar.

A) lowering nominal; decreasing

B) lowering real; decreasing

C) raising nominal; increasing

D) raising real; increasing

8) A contractionary monetary policy raises the real interest rate, causing the domestic currency to ________, thereby ________ net exports.

A) appreciate; raising

B) appreciate; lowering

C) depreciate; raising

D) depreciate; lowering

 

9) A contractionary monetary policy decreases net exports by ________ interest rates and ________ the value of the dollar.

A) lowering real; decreasing

B) lowering real; increasing

C) raising nominal; increasing

D) raising real; increasing

 

10) Tobin's q is defined as the market value of firms ________ the replacement cost of capital.

A) times

B) minus

C) plus

D) divided by

 

11) Tobin's q theory suggests that monetary policy may affect investment spending through its impact on

A) stock prices.

B) interest rates.

C) bond prices.

D) cash flow.

 

12) In the late 1990s, the stock market bubble ________ the value of Tobin's q, and caused ________ in business equipment.

A) increased; underinvestment

B) increased; overinvestment

C) decreased; underinvestment

D) decreased; overinvestment

Mar 14 2020 View more View Less

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