Given Fixed Exchange Rates, Assume Mexico Initiates Expansionary Monetary and Fiscal

question 42

Multiple Choice

Given fixed exchange rates, assume Mexico initiates expansionary monetary and fiscal policies to combat recession.Other things equal, these policies will also

• A) increase both imports and exports.
• B) increase exports and reduce imports.
• C) reduce a balance-of-payments surplus.
• D) reduce a balance-of-payments deficit.

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Definitions:

Out-Group Homogeneity Bias

The perception that members of an out-group are more similar to each other than they actually are or compared to the members of the in-group.

Hypothetical Elderly

A constructed scenario or population involving older adults used to explore theoretical outcomes or behaviors.

Belief Perseverance

The persistence in holding onto beliefs even in the face of evidence to the contrary.

Fundamental Attribution Error

The tendency for people to over-emphasize personality-based explanations for behaviors observed in others while underestimating the influence of situational factors.