Considering only its direct effect on income, expansionary fiscal policy tends to:
A. decrease income and imports, shifting the U.S. trade balance in the direction of a surplus.
B. increase income and imports, shifting the U.S. trade balance in the direction of a surplus.
C. decrease income and imports, shifting the U.S. trade balance in the direction of a deficit.
D. increase income and imports, shifting the U.S. trade balance in the direction of a deficit.
Answer: D
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If, following the hurricane, the price remained at its pre-hurricane level, we would expect to see A) a surplus of oranges. B) a shortage of oranges. C) an increase in the demand for oranges. D) the quantity demanded equal to the quantity supplied.
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