Suppose there were a large increase in net exports. If the Fed wanted to stabilize output,

large increase

Suppose there were a large increase in net exports. If the Fed wanted to stabilize output, it could(Points : 2)        buy bonds to increase the money supply.        buy bonds to decrease the money supply.        sell bonds to increase the money supply.        sell bonds to decrease the money supply. Question 14. 14. The “natural” rate of unemployment is the unemployment rate toward which the economy gravitates in the(Points : 2)        short run, and the natural rate is the socially optimal rate of unemployment.        long run, and the natural rate is the socially optimal rate of unemployment.        short run, and the natural rate is not necessarily the socially optimal rate of unemployment.        long run and the natural rate is not necessarily the socially optimal rate of unemployment. Question 15. 15. A country purchases $3 billion of foreign-produced goods and services and sells $2 billion dollars of domestically produced goods and services to foreign countries.  It has(Points : 2)        exports of $3 billion and a trade surplus of $1 billion.        exports of $3 billion and a trade deficit of $1 billion.        exports of $2 billion and a trade surplus of $1 billion.        exports of $2 billion and a trade deficit of $1 billion. Question 16. 16. If the stock market crashes, then(Points : 2)        aggregate demand increases, which the Fed could offset by increasing the money supply.        aggregate demand increases, which the Fed could offset by decreasing the money supply.        aggregate demand decreases, which the Fed could offset by increasing the money supply.        aggregate demand decreases, which the Fed could offset by decreasing the money supply. Question 17. 17. Historically, the drastic change in real GDP during business cycles such as recessions has been(Points : 2)        mostly a change in investment spending.        mostly a change in consumption spending.        about equally divided between consumption and investment spending.        sometimes mostly a change in consumption and sometimes mostly a change in investment.

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