If the Government of a Small Open Economy Wishes to Reduce

question 132

Multiple Choice

If the government of a small open economy wishes to reduce a trade deficit, which policy action will be successful in achieving this goal?

• A) increasing taxes
• B) increasing government spending
• C) increasing investment tax credits
• D) imposing protectionist trade policies

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Definitions:

National Banking System

A system established in the United States during the Civil War that created a uniform system of banking and currency, primarily through the National Bank Acts of 1863 and 1864.

Bank Notes

Paper money issued by banks that is used as legal tender and is backed by the promise to pay the bearer the value of the note on demand.

Lincoln

The 16th President of the United States, Abraham Lincoln, who led the country during the Civil War and worked to end slavery.

Issue of Slavery

A central and contentious problem in American history, focusing on the ethical, moral, and economic concerns surrounding the practice of slavery, particularly in the 18th and 19th centuries.