In an Open Economy,an Increase in Net Exports Because of Increased

question 55

Multiple Choice

In an open economy,an increase in net exports because of increased demand for domestic products by foreigners should cause the domestic real interest rate to ________ and should cause desired saving minus desired investment to ________.

• A)rise; rise
• B)rise; fall
• C)fall; rise
• D)fall; fall

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Definitions:

Deductions and Credits

Financial tools allowed by tax law to reduce taxable income or the tax itself, with deductions lowering taxable income and credits directly reducing the tax payable.

Maximum Penalty

The highest possible financial charge or punishment that can be imposed for a violation of a rule or law.

Failure to File

The failure of an individual or business to submit their tax return by the due date, which can result in penalties and interest charges.

Qualifying Widow(er)

A tax filing status allowing a widowed spouse to use married filing jointly tax rates for up to two years after the year of their spouse's death, provided they have a dependent child.