For This Question,assume That There Is a Simultaneous Increase in Government

question 60

Multiple Choice

For this question,assume that there is a simultaneous increase in government spending and monetary contraction.In a flexible exchange rate regime,we know with certainty that such a policy mix will cause which of the following?

• A)an increase in the domestic interest rate
• B)an increase in the exchange rate
• C)a reduction in net exports
• D)all of the above
• E) only A and C

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Definitions:

Secretary of State

A high-ranking official in the government responsible for foreign affairs or domestic administrative matters, depending on the country.

Minor

A person under the legal age of adulthood, which varies by country but is commonly 18 years old, and therefore has restricted legal rights and responsibilities.

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