Suppose Policy Makers Want to Reduce Y and Keep NX

question 23

Multiple Choice

Suppose policy makers want to reduce Y and keep NX constant. Which of the following policies would most likely achieve this?

• A) A decrease in government spending and an increase in the real exchange rate.
• B) Encourage the country's trading partners to implement policies that will decrease foreign income.
• C) A real exchange rate depreciation.
• D) A decrease in government spending.
• E) A real exchange rate appreciation.

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Definitions:

External Attribution

The process of attributing the cause of one's own or others' behavior to external factors or the situation rather than to internal characteristics.

Explanation

The process of making something clear or understandable by describing the relevant facts or ideas.

Surrounding Situation

The environmental and contextual factors that are currently present around an individual and can influence their behavior or actions.

Social Security

A government program designed to provide financial assistance and support to people with insufficient or no income, especially the elderly, disabled, and unemployed.