Under a Fixed Exchange-Rate System and High Capital Mobility,a Contractionary

question 26

Multiple Choice

Under a fixed exchange-rate system and high capital mobility,a contractionary fiscal policy leads to a:

• A) Trade-account deficit and a capital-account surplus
• B) Trade-account deficit and a capital-account deficit
• C) Trade-account surplus and a capital-account surplus
• D) Trade-account surplus and a capital-account deficit

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Definitions:

Algebraic Expression

A mathematical phrase that can contain numbers, variables, and operation symbols but no equals sign.

Evaluate

The process of calculating the value of an expression or determining the outcome of a mathematical operation.

Quarters

One-fourth portions of a whole, commonly used to divide years or financial results.

Pennies

The smallest denomination of currency in many countries, typically worth one-hundredth of the basic unit of currency.