Why Is the Multiplier for Contractionary Fiscal Policy Smaller in an Open

question 99

Multiple Choice

Why is the multiplier for contractionary fiscal policy smaller in an open economy?

• A)Contractionary fiscal policy reduces the deficit,which raises the interest rate,which raises the foreign exchange value of the dollar,which increases net exports.
• B)Contractionary fiscal policy increases the deficit,which raises the interest rate,which reduces the foreign exchange value of the dollar,which increases net exports.
• C)Contractionary fiscal policy reduces the deficit,which reduces the interest rate,which reduces the foreign exchange value of the dollar,which increases net exports.
• D)Contractionary fiscal policy reduces the deficit,which reduces the interest rate,which reduces the foreign exchange value of the dollar,which decreases net exports.

---

Definitions:

Leg Exercises

Physical activities aimed specifically at strengthening and toning the muscles of the legs.

Preoperative Assessment

An evaluation of a patient's health status before undergoing surgery to identify any potential risk factors.

Anesthesia Provider

A healthcare professional who administers anesthetics, managing patients’ pain and consciousness levels during procedures.

Femoral Artery

A major artery located in the thigh that supplies blood to the lower quadrant of the body, including the leg and foot.