. Assume that the US economy expands and that the US Federal Reserve Bank, worried by rising inflation, decides to raise interest rates. Which of the following would not occur? A) The US dollar will appreciate.B) Interest rates in other countries will fall.C) The current account of the US's trading partners will improve.D) There will be a fall in US exports.

If there is an expansion in the United States, it will lead to arise inflation in the economy due to…

Answered: Assume that the US economy expands and…

Brief Principles of Macroeconomics (MindTap Course List)

8th Edition

ISBN:9781337091985

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter14: A Macroeconomic Theory Of The Open Economy

Section: Chapter Questions

Problem 7PA

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. Assume that the US economy expands and that the US Federal Reserve Bank, worried by rising inflation, decides to raise interest rates. Which of the following would not occur?

A) The US dollar will appreciate.
B) Interest rates in other countries will fall.
C) The current account of the US's trading partners will improve.
D) There will be a fall in US exports.

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