If Expansionary Aggregate Demand-Oriented Macroeconomic Policy Is to Be Used

question 19

Multiple Choice

If expansionary aggregate demand-oriented macroeconomic policy is to be used to move The economy towards simultaneous external and internal balance, in which one of the Following situations would the policy indeed move the economy towards the attainment Of both goals?

• A) deficit in the current account; unacceptably high unemployment
• B) deficit in the current account; unacceptably rapid inflation
• C) surplus in the current account; unacceptably high unemployment
• D) surplus in the current account; unacceptably high inflation

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Definitions:

Firm's Assets

All items of value owned by a company, such as cash, equipment, and intellectual property.

Call Option

An economic deal that permits the buyer to have the option to acquire a stock, bond, commodity, or another asset at a predetermined price during a designated period, without being obligated to do so.

Put Option

A financial contract giving the holder the right, but not the obligation, to sell a specific amount of an underlying asset at a set price within a specific time.

Warrant

An instrument that gives the holder the right, but not the obligation, to buy or sell a certain asset at a specified price prior to or on a specific date.