In an Open Economy, Contractionary Fiscal Policy Causes

Multiple Choice

In an open economy, contractionary fiscal policy causes:

A) interest rates to rise and inflows of foreign capital.
B) interest rates to fall and inflows of foreign capital.
C) interest rates to rise and outflows of foreign capital.
D) interest rates to fall and outflows of foreign capital.
E) no change in interest rates and outflows of foreign capital.