## Question

###### 19 20 QUESTION 19 A country with a floating exchange rate faces a short-run recession and...

19 20

QUESTION 19 A country with a floating exchange rate faces a short-run recession and current account deficit. Policymakers want to use temporary expansionary monetary policy to increase both output and the current account balance. Will they be successful? O Only with increasing output O Only with increasing the current account balance O No, not with either goal Yes, with both goals QUESTION 20 and output will In the short run, if the central bank decreases the money supply, the currency will A appreciate; rise B. depreciate; fall C. appreciate; fall D.depreciate; rise

## Answers

Question 19

A country with a floating exchange rate faces a short-run recession and current account deficit. Policymakers want to use temporary expansionary monetary policy to increase both output and the current account balance. Will they be successful?

Answer : Yes with both goals.

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