Exchange Rates and the Balance of Payments (id: 5f3370775)

本题目来源于试卷: Exchange Rates and the Balance of Payments，类别为 IB经济学

[单选题]
Select from the table below ux.*bm 6qcaq1xhsq6 k1cw*5v the apa8sq8 qoy b +a2rs)sh.propriate transmission mechanism of a contractionary monos sqh8)8ra 2qa+b ys.etary policy which involves raising interest rates to achieve an external balance.

	Aggregate Demand	Real GDP	Net Exports
A.	Decreases	Decreases	Increase
B.	Increases	Increases	Decrease
C.	Decreases	Decreases	Decrease
D.	Increases	Increases	Increase

A.
B.
C.
D.


参考答案:  A


本题详细解析:

A

$\underset{‾}{\text{Key idea}}$:
An external balance refers to a sustained situation where imports of goods and services are roughly equal to exports of goods and services.

$\underset{‾}{\text{Explanation}}$:
Choice A is correct as contractionary monetary policy in the form of higher interest rates has the following effects:

• disincentivises borrowing by households and firms, lowering consumption spending and domestic investment
• lowering aggregate demand and real GDP
• decreasing imports as AD falls, improving the trade balance
• lowers the average price level, lowers the relative price of exports, increases the relative price of imports, improving the trade balance
• as the trade balance improves, the current account improves and moves toward an external balance

Choices B and D are incorrect because contractionary monetary policy shifts the aggregate demand curve to the left, lowering real GDP in equilibrium.

Choice C is incorrect because although both aggregate demand and real GDP will indeed decrease, it is inaccurate that net exports will also fall, leading to a deterioration of the external balance.

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