Expansionary Fiscal Policy Can Lead to a Decline in Net

question 43

Multiple Choice

Expansionary fiscal policy can lead to a decline in net exports because:

• A)it increases interest rates, increasing the exchange value of the dollar and decreasing net exports.
• B)it increases interest rates, decreasing the exchange value of the dollar and decreasing net exports.
• C)it decreases interest rates, increasing the exchange value of the dollar and decreasing net exports.
• D)it decreases interest rates, decreasing the exchange value of the dollar and decreasing net exports.

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