Multiple Choice
In a small open economy with a flexible exchange rate, an expansionary fiscal policy will cause which of the following to happen?
A) It will cause the dollar to depreciate.
B) It will cause net exports to rise.
C) It will cause an additional investment accelerator effect.
D) It will cause a reduction in the demand for Canadian-produced goods.
Correct Answer:
Verified
Correct Answer:
Verified
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