Which Cause-And-Effect Chain Would Best Explain the Reason for a Decline

question 178

Multiple Choice

Which cause-and-effect chain would best explain the reason for a decline in net exports? An expansionary fiscal policy:

• A)increases domestic interest rates and leads to an appreciation of the dollar that reduces net exports.
• B)decreases interest rates and leads to a depreciation of the dollar that reduces net exports.
• C)increases domestic interest rates and leads to a depreciation of the dollar that reduces net exports.
• D)decreases interest rates and leads to an appreciation of the dollar that reduces net exports.

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