An economic populist movement A) is likely to create long-term ...

[bclement10]

An economic populist movement
 
  A) is likely to create long-term economic stability.
  B) favors promotion of export-based industries and fiscal austerity.
  C) is less likely to use expansionary policy due to inflation risks.
  D) uses economic tools to obtain support from labor and domestically oriented businesses.

Question 2

The government budget deficit and the trade deficit are often called the twin deficits. Explain why this name applies, and why it is not always accurate.
 
  What will be an ideal response?

[Kdiggy]

Answer to Question 1

D

Answer to Question 2

All other things equal, an increase in government spending that is not funded by an increase in taxes will result in an increase in the trade (or current account) deficit. However, it is not necessarily the case that in times of rising budget deficits, the trade (or current account balance) will always worsen. For example, during an economic recession, most countries experience government budget deficits. State, local, and federal governments all saw dramatic increases in their deficits from 2007 to 2010 as unemployment rose and tax collections fell. Nevertheless, the U.S. current account balance improved slightly due to the fall in consumption and the decline in spending on imports.