Given Fixed Exchange Rates,assume Mexico Initiates Contractionary Monetary and Fiscal

question 56

Multiple Choice

Given fixed exchange rates,assume Mexico initiates contractionary monetary and fiscal policies to combat inflation.These policies will also:

• A) Reduce a balance-of-payments surplus
• B) Reduce a balance-of-payments deficit
• C) Increases both imports and exports
• D) Decrease both imports and exports

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