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Expansionary Fiscal Policy Increases Income, Which Increases Imports, and This

question 68

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Expansionary fiscal policy increases income, which increases imports, and this in turn increases the size of the trade deficit.


Definitions:

Fringe Benefit

Additional compensation provided to employees beyond their base salaries, such as health insurance, retirement plans, and paid time off.

Loan Payment Schedule

A detailed plan indicating the amounts due and payment dates over the life of a loan.

Effective Rate

The actual interest rate an investment earns or a loan accrues due to compounding over a specified period.

Amortized

Refers to the gradual reduction of a debt over time by paying regular installments that cover both interest and principal.

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