If a country tries to stimulate the economy with fiscal policy, the effects will be exchange rate
A. depreciation, lower interest rates, and a small increase in aggregate demand.
B. depreciation, higher interest rates, and a small decrease in aggregate demand.
C. appreciation, lower interest rates, and a small increase in aggregate demand.
D. appreciation, higher interest rates, and a small increase in aggregate demand.
Answer: D
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A resource that earns only economic rent
a. cannot be employed in any other line of production, so its opportunity cost is zero b. is rental payment for a resource that has already been paid for c. is impossible because all resources have an opportunity cost associated with their use d. is not fixed in quantity e. has a perfectly elastic supply curve
The potential output of an economy is: a. the output level at which inflation is very high
b. the output level at which nominal GDP is equal to real GDP. c. less than the full-employment rate of output. d. the output level at which total unemployment is zero. e. also referred to as the natural rate of output.