An Increase in Income Generated by an Increase in the Country

Multiple Choice

An increase in income generated by an increase in the country risk premium will not occur if there is a(n) ______ sufficient to offset the decline in the demand for money caused by the higher risk premium.

A) increase in the money supply
B) decrease in government spending
C) increase in the price level caused by more expensive imports
D) fall in the price level caused by less expensive imports