Suppose the U

Multiple Choice

Suppose the U.S. economy is going into a recession. Considering the effect of monetary policy on trade through its impact on income only, the domestic problem calls for:

A) contractionary monetary policy, which will increase the U.S. trade deficit.
B) contractionary monetary policy, which will decrease the U.S. trade deficit.
C) expansionary monetary policy, which will increase the U.S. trade deficit.
D) expansionary monetary policy, which will decrease the U.S. trade deficit.