Which of the Following Explains Why a Budget Deficit Can

question 45

Multiple Choice

Which of the following explains why a budget deficit can cause a trade deficit?

• A) An increase in the budget deficit raises domestic interest rates,resulting in a current account surplus and an appreciation of its currency.
• B) An increase in the budget deficit lowers domestic interest rates,resulting in a current account deficit and a depreciation of the currency.
• C) An increase in the budget deficit raises domestic interest rates,resulting in a capital account surplus and an appreciation of the currency.
• D) An increase in the budget deficit lowers domestic interest rates,resulting in a capital account deficit and a depreciation of the currency.

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Definitions:

Customer Needs

Refers to the wants or desires that a customer expects a product or service to fulfill.

Process Value Analysis

Identifies and evaluates core processes for their performance contributions to customer satisfaction.

Value Chain Analysis

A strategic analysis tool that maps out the sequence of activities an organization performs to create value for its customers.

Continuous Improvement

An ongoing effort to improve products, services, or processes through incremental and breakthrough improvements.