Expansionary fiscal policy leads to
A) lower exchange rates, increased exports, and increased imports.
B) higher exchange rates, decreased exports, and decreased imports.
C) lower exchange rates, decreased exports, and decreased imports.
D) higher exchange rates, decreased exports, and increased imports.
Ans: D) higher exchange rates, decreased exports, and increased imports.
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In 1973 and again in 1979, the Organization of Petroleum Exporting Countries (OPEC) raised the world price of crude oil and increased their revenue as well. Which of the following is a TRUE statement regarding these OPEC price hikes?
A) Their revenue increased because the demand for oil was income inelastic. B) Their revenue increased because the demand for oil was price inelastic. C) Their revenue would have increased regardless of income elasticity or price elasticity because oil is an imported product for most nations. D) Their revenue only increased because oil was already very expensive.
The effects of tax incentive programs such as IRAs and 401(k) accounts suggest that these government programs designed to increase saving lead to
A) a decrease in the private capital stock. B) decreased labor productivity. C) an increase in the standard of living. D) an increase in the real interest rate.
Someone who derives benefits from something not paid for is a ______.
a. negative spillover b. rival consumer c. free rider d. moral hazard
An appeal to people's sense of civic or moral responsibility will ________ the free-rider problem and lead to a ________ level of contribution to the public good.
A. increase; smaller B. increase; larger C. reduce; smaller D. reduce; larger