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soldier1979 [14.2K]
4 years ago
15

Suppose foreigners find U.S. goods and services more desirable for some reason other than a change in the exchange rate. Which p

olicies could be used to offset the resulting change in output? a. a decrease in the money supply and a decrease in government purchases. b. a decrease in the money supply and an increase in government purchases. c. an increase in the money supply and a decrease in government purchases. d. an increase in the money supply and an increase in government purchases.
Business
2 answers:
Mashcka [7]4 years ago
8 0

Answer:

The correct answer is option a.

Explanation:

If foreigners find US  goods and services more desirable, they will demand more of these goods and services. The price level will increase. The domestic firms will start producing more to earn higher revenue and profits. The output level will increase.

To offset this increase in output the government will decrease money supply in the economy. To do so the government can adopt several measures. Government can adopt contractionary monetary or fiscal policy. Government can reduce money supply by reducing purchases.

alekssr [168]4 years ago
5 0

Answer: Option (a) is correct.

Explanation:

Correct Option:  A decrease in the money supply and a decrease in government purchases.

If US goods and services are more desirable for foreigners then the exports of united states increases. Therefore, the earnings from the exports increases and hence, there will be more money in the market which increases the money supply in an economy.

So, the fed uses the Contractionary monetary policy and fiscal policy to offset the resulting change in output.

∴ Contractionary monetary policy will results in decrease in the money supply and Contractionary fiscal policy will results in decrease in government purchases.

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If the multiplier equals 2 and the AD shortfall is $6 million, the desired fiscal stimulus is
Ahat [919]

If the multiplier equals 2 and the AD shortfall is $6 million, the desired fiscal stimulus is $3 million.

<h3>What is the shortfall?</h3>

The term shortfall has referred to the deficiency of something in the market. When the availability of goods is not adequate and suppliers fail to provide them. This situation is considered as shortfall.

To calculate the desired fiscal stimulus

desired fiscal stimulus= AD shortfall/ Multiplier

                                    =$6 million/ 2

                                    = $3 million

Therefore, the desired fiscal stimulus is $3 million.

Learn more about desired fiscal stimulus , here:

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3 0
2 years ago
A monopoly is illegal:_____.
stiv31 [10]

Answer:

B

Explanation:

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3 years ago
Explain the role of promotion as a marketing function
Luden [163]
To promote by introducing your product
4 0
3 years ago
Which of the following is NOT listed on a balance sheet?
lana [24]

Answer:

the balance sheet displays the company's total assets, and how these assets are ... found line items under Current Assets, Long-Term Assets, Current Liabilities, ... This account includes the balance of all sales revenue still on credit, net of any ... Capital  

also assets =liabilites

Explanation:

5 0
3 years ago
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Allushta [10]

Solution:

Numerator (Basic EPS): Net income = $900 million;

Preferred  dividends = $27 million (9% x $100 = $9/share x 3 million;

Since  the preferred stock is cumulative, the dividend is deducted whether  or not paid)

Denominator (Basic EPS): Weighted average # shares of common stock outstanding

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10/1 – 12/31 => 4 x (3/12) = 1

= 567 - 21 - 1 = 547

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Basic EPS = ( $900 -  $27 ) ÷ $547

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4 0
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