If a Government Increases Its Budget Deficit, Which Statement Would

question 170

Multiple Choice

If a government increases its budget deficit, which statement would best predict the effects?

• A) The real exchange rate and domestic investment rise.
• B) The real exchange rate and domestic investment fall.
• C) The real exchange rate rises, and domestic investment falls.
• D) The real exchange rate falls, and domestic investment rises.

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Definitions:

Regulatory License

An official permission or authorization granted by a governing body that allows an individual or company to conduct certain types of business.

Revenue License

A revenue license is an official permission or document that allows an individual or business to conduct certain activities, typically involving the sale of goods or services, where the license serves as a source of revenue for the issuing authority.

Usury Statute

Laws regulating the maximum interest rate that can be charged on loans, to protect borrowers from excessively high rates.

Engaging

Captivating or holding someone's interest or attention.