If a Government Increases Its Budget Deficit, Which Statement Would

question 9

Multiple Choice

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

• A) The real exchange rate appreciates, and the trade balance moves toward surplus.
• B) The real exchange rate appreciates, and the trade balance moves toward deficit.
• C) The real exchange rate depreciates, and the trade balance moves toward surplus.
• D) The real exchange rate depreciates, and the trade balance moves toward deficit.

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Definitions:

Harmless Substance

A material or compound that is not likely to cause injury, damage, or disease.

Partial Thromboplastin Time

A blood test that measures how long it takes blood to clot, used to assess bleeding disorders or the effects of blood-thinning medications.

PT

Short for physical therapy, a type of treatment aimed at helping patients regain or improve their physical abilities.

Excessive Amounts

Quantities that surpass what is normal, necessary or reasonable.