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According to the Assignment Rule, Which of the Following Policy

Question 7

Multiple Choice

According to the assignment rule, which of the following policy mixes is appropriate for a country with high inflation, a balance of payments surplus, and fixed exchange rates?


A) Contractionary fiscal policy and contractionary monetary policy
B) Contractionary fiscal policy and expansionary monetary policy
C) Expansionary fiscal policy and expansionary monetary policy
D) Expansionary fiscal policy and contractionary monetary policy

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