Expansionary fiscal policy definitely raises the exchange rate.
Answer the following statement true (T) or false (F)
False
Expansionary fiscal policy has an ambiguous effect on the exchange rate, because expansionary fiscal policy raises interest rates, which puts upward pressure on the exchange rate, but it also raises income, which puts downward pressure on the exchange rate. The effect of expansionary fiscal policy is determined by the magnitude of each respective upward and downward pressure.
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The fact that output gaps will not last indefinitely, but will be closed by rising or falling inflation is the economy's:
A. income-expenditure multiplier. B. self-correcting property. C. short-run equilibrium property. D. long-run equilibrium property.
Human capital refers to the
A) accumulated financial capital people have acquired. B) accumulated skill and knowledge of human beings. C) accumulation of money by human beings. D) accumulation of money and equipment used by human beings. E) accumulated equipment used by human beings.
The Economic Stabilization Act of 1970 gave private industry the right to establish wage and price controls, but President Nixon vetoed this power
Indicate whether the statement is true or false
When an exchange rate is established as a fixed peg, active intervention may be required to maintain the target-pegged rate
a. True b. False Indicate whether the statement is true or false