Which of the Following Is a Self-Correcting Tendency in the Market

question 11

Multiple Choice

Which of the following is a self-correcting tendency in the market when an economy is in the inflation-and-deficit zone?

• A) The loss of foreign exchange reserves compels the government to impose price controls and trade controls.
• B) The macroeconomic imbalances cause international lenders to increase the interest rate on the country's external debt.
• C) Domestic inflation reduces the real exchange rate.
• D) All of the above.