In a Fixed Exchange Rate Regime, Which of the Following

question 22

Multiple Choice

In a fixed exchange rate regime, which of the following policies could be implemented to increase a trade deficit and leave aggregate demand constant?

• A) Increase government spending and devalue the currency.
• B) Decrease government spending.
• C) Increase government spending and revalue the currency.
• D) Increase government spending.
• E) Revalue the currency.

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