What Is the Correct Order of Events Following an Expansionary

question 51

Multiple Choice

What is the correct order of events following an expansionary fiscal policy with a fixed exchange rate?

• A)Interest rates rise,overall balance-of-payments may improve,money supply falls to defend fixed exchange rate
• B)Production and income rise,money supply falls to defend fixed exchange rate,capital flows in
• C)Interest rate rises,capital flows in,overall balance-of-payments may improve,money supply rises to defend fixed exchange rate
• D)Production and income rise,money supply falls to defend fixed exchange rate,overall balance-of-payments may improve

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