Consider an Open-Economy AD/AS Macro Model

question 1

Multiple Choice

Consider an open-economy AD/AS macro model.An expansionary fiscal policy will generally increase the government's budget ________ and also tends to ________ and thus ________ net exports.

• A)deficit; appreciate the currency; decrease
• B)surplus; depreciate the currency; increase
• C)deficit; appreciate the currency; increase
• D)surplus; appreciate the currency; decrease
• E)deficit; depreciate the currency; decrease

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Definitions:

Net Realizable Value

The estimated selling price of goods minus the cost of their sale or completion, used primarily in inventory valuation and accounts receivable.

Historical Cost

Historical cost is the original monetary value of an economic item purchased or incurred, used as a basis for accounting and financial reporting.

Replacement Cost

The current cost of replacing an asset with a similar one at its current market price.

Reorganization

A process aimed at restructuring a company's financial or operational aspects for efficiency or to facilitate a smoother operation.