If a Foreign Trading Partner of the United States Increases

question 62

Multiple Choice

If a foreign trading partner of the United States increases its budget deficit, raising interest rates in that country:

• A)U.S. exports and AD will both tend to rise.
• B)U.S. exports and AD will both tend to fall.
• C)U.S. exports will increase but AD will be unchanged.
• D)there will be an indeterminate effect on U.S. exports and AD.

---

Definitions:

Health Insurance

Health insurance is a form of insurance coverage that typically pays for medical, surgical, prescription drug, and sometimes dental expenses incurred by the insured.

Retirement Plan

A financial arrangement designed to replace employment income upon retirement, often including contributions from both the employer and employee.

Federal Income Taxes

Taxes levied by the federal government on the annual income of individuals, corporations, trusts, and other legal entities.

Maturity Date

The specified date on a financial instrument at which the principal (or face value) is paid back to the investors and the instrument is no longer valid.