How Might a Budget Deficit Affect the Balance of Trade

question 151

Multiple Choice

How might a budget deficit affect the balance of trade?

• A)A budget deficit raises interest rates,which raises exchange rates and increases the balance of trade.
• B)A budget deficit raises interest rates,which raises exchange rates and reduces the balance of trade.
• C)A budget deficit reduces interest rates,which raises exchange rates and reduces the balance of trade.
• D)A budget deficit reduces interest rates,which reduces exchange rates and reduces the balance of trade.

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Definitions:

Biological

Pertaining to the processes and phenomena of living organisms or life itself.

Neo-Freudian

Refers to psychologists who accepted Freud's basic theory of psychoanalysis but modified and expanded upon it in various ways, particularly concerning social and cultural factors.

Humanistic

Pertaining to a psychological perspective which emphasizes an individual's inherent drive towards self-actualization and creativity.

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A therapeutic approach or assessment tool designed to be culturally sensitive and appropriate for individuals from diverse backgrounds.