For an Economy Suffering from High Inflation and a Large

question 18

Multiple Choice

For an economy suffering from high inflation and a large external deficit,the standard prescription for stabilization entails fiscal:

• A) austerity to reduce demand and an appreciation of the exchange rate.
• B) austerity to reduce demand and a real appreciation.
• C) stimulus to expand supply and a real devaluation.
• D) stimulus to expand supply and a real appreciation.

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Definitions:

Shared Anxiety

Anxiety experienced collectively among a group of individuals, often due to a common concern or threat.

Stressor

Any event or situation that causes stress, triggering a physical, mental, or emotional response.

Broaden-And-Build Model

A theory in positive psychology proposing that positive emotions expand an individual's attention and thinking, leading to increased creativity and resilience.

Positive Emotions

Emotions that are associated with positive feelings and experiences, such as joy, gratitude, contentment, and love.