As a Result of the Increased Deficit Associated with Discretionary

question 1

Multiple Choice

As a result of the increased deficit associated with discretionary fiscal policy, _____

• A) both the interest rate and real output fall.
• B) both the interest rate and nominal output rise.
• C) the interest rate falls and real output rises.
• D) the interest rate rises and nominal output falls.
• E) the natural rate of unemployment rises and the interest rate falls.

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Definitions:

Coffee

A beverage made from roasted and ground beans of the Coffea plant, consumed globally for its stimulating effect.

Exporter

An individual or company that sells goods or services to another country.

Domestic Consumers

People or families in a nation buying products and services for their own consumption.

Silk

A natural protein fiber, obtained from the cocoons of silkworms, used in the textile industry for making luxurious fabrics.