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Under Fixed Exchange Rates, Balance of Payments Deficits Will Not

Question 85

Multiple Choice

Under fixed exchange rates, balance of payments deficits will not be caused by


A) the income elasticity of demand for imports being higher than the income elasticity of demand for exports.
B) inflation in this country being higher than that in the economies with which it trades.
C) a deterioration in the terms of trade.
D) faster growth.

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