Under a Fixed Exchange Rate Regime,contractionary Fiscal Policy Will Tend

question 30

Multiple Choice

Under a fixed exchange rate regime,contractionary fiscal policy will tend to cause which of the following?

• A)a reduction in imports
• B)a reduction in net exports
• C)an increase in investment
• D)all of the above

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Definitions:

Rifting

The process of continental crust being pulled apart, leading to the formation of new oceanic crust and the expansion of ocean basins.

Salt Domes

Geological formations created when a thick bed of evaporite minerals (primarily salt) is pushed upward by the pressure of overlying rock layers.

Less Dense

Describes materials that have a lower mass per unit volume compared to others, often leading to buoyancy in fluids.

Turbidity Currents

Underwater density currents that move swiftly downslope due to increased density from suspended sediments.