For This Question,assume That There Is a Simultaneous Increase in Government

question 60

Multiple Choice

For this question,assume that there is a simultaneous increase in government spending and monetary contraction.In a flexible exchange rate regime,we know with certainty that such a policy mix will cause which of the following?

• A)an increase in the domestic interest rate
• B)an increase in the exchange rate
• C)a reduction in net exports
• D)all of the above
• E) only A and C

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Definitions:

Levator Scapulae

A muscle located in the side and back of the neck that elevates the shoulder blade.

Serratus Anterior

A muscle that originates on the surface of the upper eight or nine ribs and inserts along the entire anterior length of the medial border of the scapula.

Pectoralis Minor

A thin, triangular muscle located beneath the pectoralis major in the chest, which plays a role in movements of the shoulder.

Rhomboideus Major

A muscle in the upper back that connects the scapula with the vertebral column, aiding in the shoulder's retraction and rotation.