Expansionary Fiscal Policy in an Open Economy

question 11

Multiple Choice

Expansionary fiscal policy in an open economy

• A)leads to a balance of trade surplus.
• B)decreases America's capital account surplus and the current account deficit by the same amount.
• C)increases both America's capital account surplus and current account deficit by equal amounts.
• D)increases America's capital account surplus more than it increases the current account deficit.

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Definitions:

Controllable Margin

A metric used in management accounting, representing the difference between sales revenue and controllable costs.

Controllable Margin

The portion of income that can be directly influenced by management decisions, excluding fixed costs and uncontrollable expenses.

Operating Assets

Assets used by a business in its daily operations to generate revenue, excluding investment and non-operational assets.

ROI

Return on Investment, a performance measure used to evaluate the efficiency of an investment or compare the efficiency of different investments.