In a Fixed Exchange Rate Regime,which of the Following Policies

question 34

Multiple Choice

In a fixed exchange rate regime,which of the following policies could be implemented to reduce a trade deficit and leave aggregate demand constant?

• A)devalue the currency
• B)increase government spending
• C)decrease government spending
• D)decrease government spending and devalue the currency
• E) increase government spending and revalue the currency

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Definitions:

Selective Perception

The process by which individuals perceive what they want to in media messages while ignoring opposing viewpoints.

Stimulus Discrimination

The learned ability to distinguish between similar stimuli and respond only to the actual stimulus associated with a reward or punishment.

Selective Retention

The psychological process whereby people more easily remember information that is consistent with their beliefs, values, and previous experiences, often leading to biased recollection.

Selective Exposure

The tendency of individuals to preferentially seek out and attend to information that conforms to their existing beliefs and values.