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    Economics Principles and Policy Study Set 2
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    Exam 36: Exchange Rates and the Macroeconomy
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    What Does Macroeconomic Theory Predict as the Main Economic Effect
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What Does Macroeconomic Theory Predict as the Main Economic Effect

Question 166

Question 166

Multiple Choice

What does macroeconomic theory predict as the main economic effect of a reduction in the budget deficit?


A) Lower real interest rates
B) A drop in the exchange rate
C) An increase in net exports
D) All of these responses are correct.

Correct Answer:

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