Assume Perfect Capital Mobility and Floating Exchange Rates

question 38

Multiple Choice

Assume perfect capital mobility and floating exchange rates.If the government runs a budget deficit,the domestic currency will _______ and cause the IS curve to ________.

• A) Appreciate, shift to the right
• B) Appreciate, shift to the left
• C) Depreciate, shift to the right
• D) Depreciate, shift to the left

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Definitions:

Negative Self-Talk

The habit of generating critical or pessimistic thoughts about oneself that can affect one's self-esteem and mental health.

Physical Inactivity

A lack of physical activity or exercise, which can lead to negative health outcomes.

Nutrition Counseling

A health service provided by nutrition experts or dietitians to help individuals make and maintain dietary choices for better health.

Psychotherapy

A form of therapy where mental health professionals help individuals, groups, or families through talking, to explore and solve psychological issues.