Author Question: Why is the multiplier for contractionary fiscal policy smaller in an open economy? A) ... (Read 101 times)

Starlight

  • Hero Member
  • *****
  • Posts: 567
Why is the multiplier for contractionary fiscal policy smaller in an open economy?
 
  A) Contractionary fiscal policy reduces the deficit, which raises the interest rate, which raises the foreign exchange value of the dollar, which increases net exports.
  B) Contractionary fiscal policy increases the deficit, which raises the interest rate, which reduces the foreign exchange value of the dollar, which increases net exports.
  C) Contractionary fiscal policy reduces the deficit, which reduces the interest rate, which reduces the foreign exchange value of the dollar, which decreases net exports.
  D) Contractionary fiscal policy reduces the deficit, which reduces the interest rate, which reduces the foreign exchange value of the dollar, which increases net exports.

Question 2

Georgia's great uncle gave her a 5,000 savings bond as a wedding gift. The bond pays 5,000 at maturity, which is in 10 years. If the interest rate is 4, the bond has a present value of  3,377.82.
 
  Indicate whether the statement is true or false



jordangronback

  • Sr. Member
  • ****
  • Posts: 339
Answer to Question 1

D

Answer to Question 2

TRUE



Related Topics

Need homework help now?

Ask unlimited questions for free

Ask a Question


 

Did you know?

Urine turns bright yellow if larger than normal amounts of certain substances are consumed; one of these substances is asparagus.

Did you know?

For pediatric patients, intravenous fluids are the most commonly cited products involved in medication errors that are reported to the USP.

Did you know?

People often find it difficult to accept the idea that bacteria can be beneficial and improve health. Lactic acid bacteria are good, and when eaten, these bacteria improve health and increase longevity. These bacteria included in foods such as yogurt.

Did you know?

Human stomach acid is strong enough to dissolve small pieces of metal such as razor blades or staples.

Did you know?

After 5 years of being diagnosed with rheumatoid arthritis, one every three patients will no longer be able to work.

For a complete list of videos, visit our video library