What Impact Might an Increase in the Budget Deficit Have

question 132

Multiple Choice

What impact might an increase in the budget deficit have on interest rates and exchange rates?

• A)Interest rates and exchange rates increase.
• B)Interest rates increase and exchange rates decrease.
• C)Interest rates decrease and exchange rates increase.
• D)Interest rates and exchange rates decrease.

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Definitions:

Payment Stream

A series of two or more payments required by a single transaction or contract.

Obligation

A legal or moral duty to do something or pay something, often within the context of contracts and agreements.

Compounded Semi-Annually

Involves calculating the addition of interest to the principal sum of a loan or deposit on a half-yearly basis, incrementally increasing the amount earned or owed.

Payment Stream

A series of payments made over a period of time, often in the context of loans or annuities.