An expansionary monetary policy is appropriate for the alleviation of domestic:
A)unemployment and compatible with the goal of correcting a trade deficit.
B)unemployment and compatible with the goal of correcting a trade surplus.
C)inflation and compatible with the goal of correcting a trade deficit.
D)inflation and compatible with the goal of correcting a trade surplus.

Question

Quizplus · Accepted Answer

An expansionary monetary policy involves increasing the money supply, lowering interest rates, and stimulating demand for goods and services. This is appropriate for alleviating domestic unemployment by encouraging firms to invest, expand production, and hire workers. However, it is not necessarily compatible with the goal of correcting a trade deficit, as the increased demand may lead to higher imports and lower exports. Nonetheless, if the trade deficit is caused by a lack of domestic demand, then an expansionary monetary policy can help to address this issue.

An Expansionary Monetary Policy Is Appropriate for the Alleviation of Domestic