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Suppose That Counter-Cyclical Fiscal Policy Pushed Up Interest Rates and the Economy

Question 45

Multiple Choice

Suppose that counter-cyclical fiscal policy pushed up interest rates and the economy had a flexible exchange rate.Which of the following would be true?


A) The exchange rate would fall,and exports would rise.
B) The exchange rate would fall,and exports would fall.
C) The exchange rate would rise,and exports would rise.
D) The exchange rate would rise,and exports would fall.

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