Under a Fixed Exchange-Rate System and High Capital Mobility,an Expansionary

question 30

Multiple Choice

Under a fixed exchange-rate system and high capital mobility,an expansionary fiscal policy leads to a:

• A) Trade-account deficit and a capital-account surplus
• B) Trade-account deficit and a capital-account deficit
• C) Trade-account surplus and a capital-account surplus
• D) Trade-account surplus and a capital-account deficit

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Definitions:

Cold War

A period of geopolitical tension between the Soviet Union and the United States from the late 1940s to 1991, marked by espionage, political rivalry, and the threat of nuclear warfare.

Freedom Train

A seven-car exhibit train that toured the United States from 1947 to 1949 to promote American history and ideals.

Marshall Plan

U.S. program for the reconstruction of post–World War Ⅱ Europe through massive aid to former enemy nations as well as allies; proposed by General George C. Marshall in 1947.

Economic Recovery

Refers to the process of a country or region's economy returning to a state of growth and stability after a period of decline or recession.