Without considering the effect that a change in the value of a currency might have on trade, the net effect of an expansionary fiscal policy is:
A. ambiguous with respect to the exchange rate, but negative with respect to the trade balance.
B. ambiguous with respect to the trade balance, but positive with respect to the exchange rate.
C. negative with respect to the exchange rate and positive with respect to the trade balance.
D. positive with respect to the exchange rate and negative with respect to the trade balance.
Answer: A
You might also like to view...
Transfer payments are:
a. cash given by firms to shareholders. b. a major source of income for the labor force. c. cash transfers like welfare benefits and social security. d. not a significant part of public policy.
"Any additional increases in government spending should be for defense," is ________ statement about ________ policy.
A. positive; monetary B. normative; monetary C. positive; fiscal D. normative; fiscal
Autonomous expenditure is spending that is:
A. based on the rate of borrowing. B. that is determined by the government. C. spent when income changes in the economy. D. not sensitive to the level of income in the economy.
A member of a cartel earns more profits by producing more than its quota and selling at a price higher than the cartel's price
Indicate whether the statement is true or false