Under a Floating Exchange Rate Regime, in the Very Short

Multiple Choice

Under a floating exchange rate regime, in the very short run (before the exchange rate adjusts) , expansionary fiscal policy will lead to:

A) improvement in both current account and financial account.
B) improvement in current account but deterioration in financial account.
C) deterioration in current account but improvement in financial account.
D) deterioration in both current account and financial account.