In a fixed exchange rate regime, which of the following policies could lead to a greater trade deficit and leave aggregate demand constant?
A) Devalue the currency.
B) Increase government spending.
C) Decrease government spending.
D) Decrease government spending and devalue the currency.
E) Increase government spending and revalue the currency.
E
You might also like to view...
Refer to Figure 15-2. In the figure above, the movement from point A to point B in the money market would be caused by
A) an open market sale of Treasury securities by the Federal Reserve. B) a decrease in real GDP. C) an increase in the price level. D) a decrease in the required reserve ratio by the Federal Reserve.
For a nation, ownership of natural resources:
a. Is essential for economic growth. Without it, nations would not have the ability to grow. b. Must expand as the nation grows because the nation needs to own natural resources to be able to export goods to the rest of the world. c. Is not as important to growth as access to natural resources. d. None of the above is true. e. All of the above are true.