Due to Macroeconomics Interdependence Between Large Countries, the Effect of a Permanent

question 37

Multiple Choice

Due to macroeconomics interdependence between large countries, the effect of a permanent fiscal expansion by Home is as follows: Home output

• A) falls, Home's currency appreciates, Foreign output rises.
• B) rises, Home's currency appreciates, Foreign output rises.
• C) rises, Home's currency depreciates, Foreign output rises.
• D) rises, Home's currency appreciates, Foreign output decreases.
• E) falls, Homes currency depreciates, Foreign output rises.

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