The Main International Repercussion of Either a Fiscal Expansion or Monetary

question 35

Multiple Choice

The main international repercussion of either a fiscal expansion or monetary contraction is to

• A)raise interest rates and the exchange rate, thereby crowding out net exports.
• B)raise interest rates and lower the exchange rate, thereby crowding in net exports.
• C)lower interest rates and the exchange rate, thereby crowding in net exports.
• D)lower interest rates and raise the exchange rate, thereby crowding out net exports.

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Definitions:

Conditioned Stimulus

An initially neutral stimulus that becomes associated with an unconditioned stimulus, leading to a conditioned response in classical conditioning.

Classical Conditioning

An instructional process where two stimuli are frequently paired together; the response, initially triggered by the second stimulus, is subsequently drawn by the first stimulus alone.

Extinction

In psychology, the gradual weakening and disappearance of a conditioned response when the conditioned stimulus is repeatedly presented without the unconditioned stimulus.

Conditioned Stimulus

A stimulus that was originally neutral but, after association with an unconditioned stimulus, leads to eliciting a conditioned response.