Which of the Following Is FALSE

question 48

Multiple Choice

Which of the following is FALSE?

• A)a rise in foreign income always improves a country's trade balance and leads to an increase in aggregate demand
• B)a rise in domestic interest rates improves a country's trade balance since it decreases imports
• C)an exchange rate depreciation improves a country's trade balance and thus increases aggregate demand
• D)an increase in domestic income worsens a country's trade balance since it increases spending on imports
• E)a decrease in exports leads to lower interest rates and a currency depreciation

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