If the central bank wants to contract aggregate demand, it can __________ the mo

Question

If the central bank wants to contract aggregate demand, it can __________ the money supply, which would __________ the interest rate.

Question 22 options:

decrease, increase

increase, decrease

decrease, decrease

increase, increase

Which of the following is a factor that influences international trade flows?

Question 23 options:

Prices at home and abroad

Incomes at home and abroad

Exchange rates for foreign currency

All of the above

If Australia has balanced trade meaning its exports equal its imports,

Question 30 options:

Net capital outflow would be negative.

Net capital outflow would equal zero.

Net capital outflow would be positive.

Net capital inflow would be positive.

If a bushel of wheat costs $6.25 in the United States, costs 50 pesos in Mexico, and the nominal exchange rate is 10 pesos per dollar, then the real exchange rate is

Question 27 options:

1.60

1.40

1.25

0.625

decrease, increase

increase, decrease

decrease, decrease

increase, increase

Explanation / Answer

22. Money supply and interest rates are inversely related. When money supply decreases, the interest rate increases, consumers hold on to their money as opportunity cost of reserving the money is less. This will lead to a decrease in aggregate demand.

a) decrease , increase

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