If Exchange Rates Are Fixed and the Money Supply Is

question 227

Multiple Choice

If exchange rates are fixed and the money supply is held constant, a contractionary fiscal policy leads to a(n) _____ in interest rates and a capital _____.

• A) decrease; outflow
• B) decrease; inflow
• C) increase; inflow
• D) increase; outflow

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Definitions:

Teratogen

Any agent that can cause developmental malformations (birth defects) or abnormalities in a developing fetus when exposure occurs during pregnancy.

Marijuana

A psychoactive drug from the Cannabis plant used for medical or recreational purposes.

Prenatal Care

Medical and healthcare provided to pregnant women to ensure the health and well-being of both the mother and the developing fetus.

Illegal Drugs

Substances whose production, sale, or possession is prohibited by law due to their potential harm to individuals and society.