Under a Fixed Exchange Rate Regime, an Expansionary Fiscal Policy

question 77

Multiple Choice

Under a fixed exchange rate regime, an expansionary fiscal policy would ____ interest rates and GDP, which would cause ____ pressure on the exchange rate, forcing the monetary authority to undertake a(n) ______ monetary policy.

• A) raise; downward (appreciation); expansionary
• B) lower; upward (depreciation); contractionary
• C) raise; upward (depreciation); contractionary
• D) lower; downward (appreciation); expansionary

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Definitions:

Crime Rates

The number of reported crimes in a given area over a specified period of time, often per 100,000 inhabitants.

Variances

In statistics and accounting, variances measure the spread between numbers in a data set or the difference between actual and expected outcomes, indicating the extent of deviation and variability.

Sociological Theories

Frameworks for understanding how society works, focusing on social relationships, structures, and institutions, and how they influence individual behavior and societal changes.

Pathologized

Considered or treated as psychologically abnormal or unhealthy.