In Most Cases,expenditure-Switching Policies Must Be Accompanied by Expenditure-Reducing Policies

question 40

Multiple Choice

In most cases,expenditure-switching policies must be accompanied by expenditure-reducing policies because

• A)expenditure-switching policies are completely ineffective without expenditure-reducing policies.
• B)inflation ensues as home country domestic expenditures switch away from foreign goods to domestic goods unless overall expenditures are reduced.
• C)inflation abroad may increase the demand for domestic goods, causing inflation to rise.
• D)the depreciation in the exchange rate may decrease the domestic price of foreign goods, causing an increase in the current account deficit.

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Definitions:

Freudian

Relating to or influenced by the ideas and works of Sigmund Freud, particularly concerning the unconscious mind, psychosexual stages, and defense mechanisms.

Jungian

Jungian pertains to the theories and methodologies related to the psychology of Carl Jung, emphasizing concepts like the collective unconscious and archetypes.

Evolutionary

Pertaining to evolution; involving gradual changes in species over generations through natural selection and genetic variation.

Biologically Adaptive Behavior

Behaviors or traits that increase the survival or reproductive success of organisms in a particular environment.