Why Is the Multiplier for Contractionary Fiscal Policy Smaller in an Open

question 99

Multiple Choice

Why is the multiplier for contractionary fiscal policy smaller in an open economy?

• A)Contractionary fiscal policy reduces the deficit,which raises the interest rate,which raises the foreign exchange value of the dollar,which increases net exports.
• B)Contractionary fiscal policy increases the deficit,which raises the interest rate,which reduces the foreign exchange value of the dollar,which increases net exports.
• C)Contractionary fiscal policy reduces the deficit,which reduces the interest rate,which reduces the foreign exchange value of the dollar,which increases net exports.
• D)Contractionary fiscal policy reduces the deficit,which reduces the interest rate,which reduces the foreign exchange value of the dollar,which decreases net exports.

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Older People

Individuals in society who are considered to be in the later stages of their life, often classified as elderly or senior citizens, typically aged 65 and older.

Functionalists

Theoretical perspective in sociology that views society as a complex system whose parts work together to promote solidarity and stability.

Inequality Work

The study or practice of addressing inequality within societies, including efforts to reduce disparities in wealth, opportunities, and treatment.

Devaluation

The reduction in value of something, which can refer to currency, assets, or social status.