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    Applied International Economics
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    Exam 18: Fixed Exchange Rates and Currency Unions
  5. Question
    Under a Fixed Exchange Rate System, a Contractionary Fiscal Policy
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Under a Fixed Exchange Rate System, a Contractionary Fiscal Policy

Question 8

Question 8

True/False

Under a fixed exchange rate system, a contractionary fiscal policy causes the central bank to intervene in the foreign exchange market and sell foreign exchange.

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