In response to the 2008 recession, the United States Federal Reserve enacted Quantitative Easing 1 and 2. The main purpose of these two rounds of quantitative easing was to increase the U. S. money supply. Suppose quantitative easing succeeded in increasing the U. S. monetary supply. How, if at all, should quantitative easing change the following variables? Use the neoclassical aggregate demandâ€"aggregate supply model.
A. U. S. interest rates
B. U. S. exchange rate, in units of foreign currency per U. S. dollar
C. U. S. exports
D. U. S. imports
E. U. S. price level
F. U. S. nominal output
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In response to the 2008 recession, the United States Federal Reserve enacted Quantitative Easing 1 a...
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