In a Fixed Exchange Rate Regime,which of the Following Policies

question 34

Multiple Choice

In a fixed exchange rate regime,which of the following policies could be implemented to reduce a trade deficit and leave aggregate demand constant?

• A)devalue the currency
• B)increase government spending
• C)decrease government spending
• D)decrease government spending and devalue the currency
• E) increase government spending and revalue the currency

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Definitions:

Higher Brain Functioning

Complex cognitive processes such as thinking, reasoning, memory, and learning, which are associated with the brain's cerebral cortex.

Two-Factor Theory

A theory on emotion that suggests emotions are based on physiological arousal and cognitive interpretation of that arousal.

Stimuli

External events or circumstances that evoke a response from an organism.

Feared

An emotion or feeling of apprehension or dread towards a specific object, situation, or outcome.