If a Government Increases Its Budget Deficit,then the Real Exchange

question 23

Multiple Choice

If a government increases its budget deficit,then the real exchange rate

• A)and domestic investment rise.
• B)and domestic investment fall.
• C)rises and domestic investment falls.
• D)falls and domestic investment rises.

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Definitions:

Marginal Utility

The extra pleasure a customer receives from consuming an additional unit of a product or service.

Total Utility

The total satisfaction received by consuming a particular amount of goods or services.

Utility

The total satisfaction received from consuming a good or service.