When the real interest rate rises in the anchor country, ...

[tiffannnnyyyyyy]

When the real interest rate rises in the anchor country, ________.
 
  A) expansionary monetary policy will be used to maintain the interest rate peg
  B) an economic stimulus is transmitted to pegged economies
  C) there will be downward pressure on the value of pegged currencies
  D) the anchor currency becomes vulnerable to a speculative attack

Question 2

If the federal government tries to make fiscal policy sustainable by decreasing expenditure on transfer programs such as Social Security, Medicare, and Medicaid, ________ will bear the burden of adjusting fiscal policy, and this will result in a
 
  lower standard of living for those who bear the burden. A) high-income households
  B) individuals in the labor force
  C) middle class taxpayers
  D) the elderly and poor

[millet]

Answer to Question 1

C

Answer to Question 2

D

[tiffannnnyyyyyy]

Gracias!

[bdobbins]

Excellent