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:

Bureaucracies

Complex organizational structures with fixed rules, a hierarchy of authority, and a full-time administrative staff, designed to coordinate and control the work of many individuals.

Bureaucratic Inertia

Refers to the tendency of large, rigid bureaucracies to continue their policies even when their clients' needs change.

Bureaucratic Ritualism

The phenomenon in which bureaucratic organizations focus more on following strict procedures and rules than on achieving their actual goals, leading to inefficiency.

Rules and Regulations

Established guidelines and laws designed to govern behavior and ensure order within a society, organization, or system.