Question

Which of the following would necessarily result in a decrease in the value of the dollar and a decrease in real interest rates?

Open market purchase of U.S. government bonds by the Fed.

Open market sale of U.S. government bonds by the Fed.

Taxes increase.

Discount rate decreases.

Government spending decreases.

Answer 1

@whpalmer4

Answer 2

I would say Open market purchase of U.S. government bonds by the Fed.

Answer 3

I came to this conclusion using the monetary mechanism where an increase in money supply would lead to monetary interest rates falling, which leads to more people borrowing money which leads to greater demand, which results in demand pull inflation. This causes the value of money and real interests rates to ultimately decrease

Answer 4

Thank you so much! I'll let you know if you're right in a minute @Dlow14

Answer 5

#fingerscrossed

Answer 6

lol me too.. I'm trying to get my grade up by retaking my quizzes and I'm doing worse than what I started with

Answer 7

Hahaha, it's a struggle

Answer 8

No kidding.. Ap macroecon was the worst mistake of my life

Answer 9

What country do you live in?

Answer 10

United States

Answer 11

Oh cool, I'm from Cape Town, South Africa :)

Answer 12

That's awesome! I think one of my friends is planning on going down there some time

Answer 13

They should, it's amazing here. Except in winter

Answer 14

I live in Florida, we have no winter...haha

Answer 15

Okay so my friends dad has like a degree in economics and he said to put something else, so I did:/ long story short, he was wrong and i still don't know if you were right..

Answer 16

Hmmm, can't you check somehow?

Answer 17

I have one more chance to take the test and I'm gonna have to go for it because I just got a 46.. lol I don't think I've ever been the recipient of a grade so low in my life

Answer 18

I'm sure you'll pull through. Try use process of elimination for some questions.

Answer 19

I did questions like this last year in highschool for Cambridge A Levels

Answer 20

I've taken down all my answers and whether they were right or wrong and what not.. so hopefully after 4 tries I'll have had every question

Answer 21

good luck!!!

Answer 22

I seriously need it! I'll probably be posting lots of questions soon

Answer 23

I might be going to bed soon though. It's 1:26 a.m here

Answer 24

Shoot..lol I think I'm going to fail anyways

Answer 25

Have a liitle faith in yourself will you :P

Answer 26

I was pretty confident to start out with but I went from a 79 to a 46.. i should have just let it go:p

Answer 27

I'm backing you for a 90!!!

Answer 28

I would kill for a 90 at this point..