In an Open Economy Like Canada's,a Fiscal Expansion by the Government

question 33

Multiple Choice

In an open economy like Canada's,a fiscal expansion by the government tends to

• A)reduce capital inflow,depreciate the currency,and increase net exports.
• B)attract foreign capital and encourage increased investment.
• C)crowd out net exports and encourage private investment.
• D)attract foreign capital,appreciate the currency,and crowd out net exports.
• E)attract foreign capital,depreciate the currency,and crowd out net exports.

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Definitions:

Cash Account

An account that records all transactions involving cash inflows and outflows.

Bank Statement

A document provided by a bank, summarizing the transactions that occurred in an account over a period.

Accrual Accounting

An accounting method that records revenues and expenses when they are earned or incurred, regardless of when the cash transaction occurs.

Interest Expense

This is the cost incurred by an entity for borrowed funds, reflected as a line-item expense in the income statement.