Suppose Policy Makers Want to Reduce NX and Keep Y

question 56

Multiple Choice

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

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

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Definitions:

Marxism

A socio-economic and political theory developed by Karl Marx, focusing on class struggle, the exploitation of the working class, and the eventual overthrow of capitalist societies.

Global Inequality

The uneven distribution of resources, opportunities, and rights among different countries and peoples worldwide.

Acceleration of Globalization

The rapid increase in cross-border social, economic, and political exchanges which results in a more interconnected and interdependent world.

Conflict Theory

A sociological perspective that emphasizes the role of power and coercion in producing social order, focusing on the conflict between different social classes.