Which of the Following Is the Chief Link Between the U.S.federal

Multiple Choice

Which of the following is the chief link between the U.S.federal budget deficit and the U.S.trade deficit during the 1980s?

A) High U.S.interest rates led to a rise in the relative value of the dollar.
B) High U.S.interest rates led to a decrease in the relative value of the dollar.
C) Higher interest rates resulted in the crowding out of some private investment,reducing the stimulating effect of the government's deficit.
D) The U.S.price level declined relative to that of foreign countries,causing U.S.interest rates to fall.
E) The additional fiscal stimulus provided by a higher government deficit encouraged some firms to invest more.