An Increase in a Country's Budget Deficit

question 16

Multiple Choice

An increase in a country's budget deficit

• A)increases net capital outflow,so the demand for its currency in the market for foreign-currency exchange shifts right.
• B)increases net capital outflow,so the supply of its currency in the market for foreign-currency exchange shifts right.
• C)decreases net capital outflow,so the demand for its currency in the market for foreign-currency exchange shifts left.
• D)decreases net capital outflow,so the supply of its currency in the market for foreign-currency exchange shifts left.

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Definitions:

Cirque

A mountain basin with steep sides and a bowl-like shape, formed by glacier activity, frequently hosting a small lake.

Moraine

A mass of rocks and sediment carried down and deposited by a glacier, typically as ridges at its edges or extremity.

Valley

A low area between hills or mountains, often with a river or stream flowing through it.