Which Chain of Events Would Promote Payments Equilibrium for a Deficit

question 56

Multiple Choice

Which chain of events would promote payments equilibrium for a deficit nation,according to the price-adjustment mechanism?

• A) Increasing money supply--increasing domestic prices--rising imports--falling exports
• B) Increasing money supply--falling domestic prices--rising imports--falling exports
• C) Decreasing money supply--increasing domestic prices--falling imports--rising exports
• D) Decreasing money supply--decreasing domestic prices--falling imports--rising exports

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