Under a fixed exchange rate system, if the inflation rate of the United States is less than the inflation rate of other nations, the
A) United States will develop a trade surplus. B) dollar will appreciate.
C) United States will develop a trade deficit. D) dollar will depreciate.
Question 2
An increase in the marginal tax rate
A) decreases the expenditure multiplier but cannot make it negative.
B) has no effect on the expenditure multiplier.
C) can either increase or decrease the expenditure multiplier.
D) increases the expenditure multiplier.
E) decreases the expenditure multiplier and can make it negative.
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