Suppose That the Government of Jordan Raises Its Budget Deficit

Multiple Choice

Suppose that the government of Jordan raises its budget deficit. Which of the following best predicts the effects of this action?

A) The real exchange rate of the Jordanian dinar would depreciate, and Jordanian net exports would rise.
B) The real exchange rate of the Jordanian dinar would depreciate, and Jordanian net exports would fall.
C) The real exchange rate of the Jordanian dinar would appreciate, and Jordanian net exports rise.
D) The real exchange rate of the Jordanian dinar would appreciate, and Jordanian net exports fall.