When investors worldwide become more willing to substitute their domestic assets for US assets (flight to safety), the U
Posted: Thu May 19, 2022 10:09 am
When investors worldwide become more willing to substitute their
domestic assets for US assets (flight to safety), the US net
capital outflow function and the IS curve become flatter. Under
those assumptions, one can predict that monetary policy becomes
relatively ____________ effective than fiscal policy to change
economic output and employment in the short run. One can also
predict that a monetary contraction would cause the US dollar to
____________.
less; depreciate
more; appreciate
more; depreciate
less; appreciate
domestic assets for US assets (flight to safety), the US net
capital outflow function and the IS curve become flatter. Under
those assumptions, one can predict that monetary policy becomes
relatively ____________ effective than fiscal policy to change
economic output and employment in the short run. One can also
predict that a monetary contraction would cause the US dollar to
____________.
less; depreciate
more; appreciate
more; depreciate
less; appreciate