If a Government Increases Its Budget Deficit,then Interest Rates

question 29

Multiple Choice

If a government increases its budget deficit,then interest rates

• A)rise and the real exchange rate appreciates.
• B)fall and the real exchange rate depreciates.
• C)rise and the real exchange rate depreciates.
• D)fall and the real exchange rate appreciates.

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Definitions:

Basic

Fundamental, relating to or forming the base or essence; not complicated or elaborated.

Behavior Tendencies

Patterns or propensities in individuals' behaviors, often predictable over time based on personality traits or past experiences.

Cluster

A collection or grouping of similar things or people positioned or occurring closely together.

Narcissism

A characteristic of personality defined by an exaggerated view of one's own worth, a strong desire for others' adoration, and an absence of compassion for others.