Assume a Country Lacks Technical Innovation in Its Domestic Industries

Multiple Choice

Assume a country lacks technical innovation in its domestic industries and, as a result, experiences a severe decline in exports.What kind of policy should this country employ to get back to a situation of internal and external balance?

A) an increase in government spending
B) an increase in tariffs on import goods
C) restrictive monetary policy in combination with expansionary fiscal policy
D) expansionary monetary policy in combination with restrictive fiscal policy
E) expansionary fiscal policy in combination with the levying of tariffs on imports