In 1995 House Speaker Newt Gingrich Threatened to Send the United

question 66

Multiple Choice

In 1995 House Speaker Newt Gingrich threatened to send the United States into default on its debt.During the day of this announcement,U.S.interest rates rose and the real exchange rate of the U.S.dollar depreciated.Which of these changes is consistent with the results of the open-economy macroeconomic model?

• A)the increase in U.S.interest rates
• B)the depreciation of the real exchange rate of the U.S.dollar
• C)Both a and b are consistent.
• D)Neither a nor b are consistent.

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Definitions:

Contractual Agreement

A legally binding agreement between two or more parties outlining the terms and conditions of a business transaction.

Financial Statements

Summarized records of a company's financial activities, including the income statement, balance sheet, cash flow statement, and statement of changes in equity, which provide insights into its financial health.

Joint Control

A situation in which two or more parties have agreed upon shared control over a business activity, requiring unanimous consent for decision-making.

Joint Ventures

A commercial enterprise undertaken jointly by two or more parties that otherwise retain their distinct identities.