How Might a Budget Deficit Affect the Balance of Trade

Multiple Choice

How might a budget deficit affect the balance of trade?

A) A budget deficit raises interest rates,which raises exchange rates and increases the balance of trade.
B) A budget deficit raises interest rates,which raises exchange rates and reduces the balance of trade.
C) A budget deficit reduces interest rates,which raises exchange rates and reduces the balance of trade.
D) A budget deficit reduces interest rates,which reduces exchange rates and reduces the balance of trade.