Suppose Policy Makers Want to Increase NX and Keep Y

question 17

Multiple Choice

Suppose policy makers want to increase NX and keep Y constant.Which of the following policies would most likely achieve this?

• A)a reduction in government spending
• B)a real depreciation
• C)a reduction in government spending and a reduction in the real exchange rate
• D)a reduction in the real exchange rate and a tax cut

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Definitions:

Beliefs

Convictions or acceptances that certain things are true or real, often without empirical evidence.

Popular Psychology

An informal approach to understanding the mind and behavior, often found in self-help books and media, rather than in academic psychology or research.

Learned Scientists

Individuals who have acquired extensive knowledge or expertise in one or more areas of science through study and research.

Empirical Evidence

Information acquired by observation or experimentation that can be used to verify or refute a theory, hypothesis, or claim.