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If a Government Increases Its Budget Deficit, Which Statement Would

Question 22

Multiple Choice

If a government increases its budget deficit, which statement would best predict the effects?


A) Interest rates rise, and the trade balance moves toward surplus.
B) Interest rates rise, and the trade balance moves toward deficit.
C) Interest rates fall, and the trade balance moves toward surplus.
D) Interest rates fall, and the trade balance moves toward deficit.

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