Which of the Following Is the Most Likely Result from an Increase

question 13

Multiple Choice

Which of the following is the most likely result from an increase in a country's government budget surplus?

• A)higher interest rates
• B)lower imports
• C)lower net capital outflows
• D)lower domestic investment

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Definitions:

Currency Appreciation

An increase in the value of one currency relative to other currencies in the foreign exchange market.

Balance of Payments

A financial statement that summarizes an economy's transactions with the rest of the world for a specific period.

Dollar-Peso Exchange Rate

The rate at which the currency of one country (USD) can be exchanged for the currency of another country (peso).

Foreign-exchange Traders

Individuals or entities that buy and sell currencies, aiming to profit from changes in exchange rates.