If a Government Started with a Deficit and Moved to a Surplus

question 1

Multiple Choice

If a government started with a deficit and moved to a surplus, which statement would best describe the effects of these changes?

• A) Domestic investment and the real exchange rate would rise.
• B) Domestic investment and the real exchange rate would fall.
• C) Domestic investment would rise, and the real exchange rate would fall.
• D) Domestic investment would fall, and the real exchange rate would rise.

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Definitions:

Competitive Markets

Markets characterized by many buyers and sellers, where no single entity can control prices, and products are relatively homogeneous.

Occupational Differences

Variations in job types, responsibilities, and compensation across different professions or industries.

Muriel Niederle

An economist known for her research in experimental economics and market design.

Lise Vesterlund

An economist known for her research in the fields of public economics and experimental economics, focusing particularly on charitable giving and gender differences in competition.