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    International Economics Study Set 9
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    Exam 18: Balance of Payments II: Output, Exchange Rates, and Macroeconomic Policies in the Short Run
  5. Question
    If the Interest Rate Rises and Government Spending Falls, What
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If the Interest Rate Rises and Government Spending Falls, What

Question 98

Question 98

Multiple Choice

If the interest rate rises and government spending falls, what will happen to output, ceteris paribus?


A) It will rise.
B) It will stay the same.
C) It will fall.
D) It is uncertain what will happen.

Correct Answer:

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