In a Large but Open Economy, When a Fiscal Expansion

question 23

Multiple Choice

In a large but open economy, when a fiscal expansion takes place, the interest rate goes up and some investment is crowded out; the expansion also causes a trade:

• A) surplus and a fall in the real exchange rate.
• B) deficit and a rise in the real exchange rate.
• C) surplus and a rise in the real exchange rate.
• D) deficit and a fall in the real exchange rate.

---

Definitions:

Directive Behaviors

Leadership actions that involve giving explicit instructions and directions to subordinates.

Highly Committed

Refers to individuals or groups that show a deep dedication and enduring loyalty to a cause, organization, or task.

Directive Leader

A leadership style wherein the leader gives specific instructions and directions to followers, focusing on task completion and adherence to rules.

Supportive Leader

A leadership approach that focuses on building trust, showing empathy and understanding, and prioritizing the well-being of team members to enhance motivation and productivity.