A government began 2019 with a budget surplus and a trade deficit. Due to the conset of recession, the government changed its policy and is now running a budget deficit. If all other factors hold constant, this change in policy will cause: a) the exchange rate and the trade deficit to increase. Ob) the exchange rate and the trade deficit to decrease. c) the exchange rate to decrease and the trade deficit to increase. d) the exchange rate to increase and the trade deficit to decrease.

A government began 2019 with a budget surplus and a trade deficit. Due to the conset of recession, the government changed its policy and is now running a budget deficit. If all other factors hold constant, this change in policy will cause: a) the exchange rate and the trade deficit to increase. Ob) the exchange rate and the trade deficit to decrease. c) the exchange rate to decrease and the trade deficit to increase. d) the exchange rate to increase and the trade deficit to decrease.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question

A government began 2019 with a budget surplus and a trade deficit. Due to the
onset of recession, the government changed its policy and is now running a budget
deficit. If all other factors hold constant, this change in policy will cause:
Oa) the exchange rate and the trade deficit to increase.
b) the exchange rate and the trade deficit to decrease.
c) the exchange rate to decrease and the trade deficit to increase.
d) the exchange rate to increase and the trade deficit to decrease.
Question 5 (
At the beginning of 2019, a government had a total debt of $540 billion dollars. It
ended 2019 with a $16 billion dollar budget surplus. In 2020, it experienced a
budget deficit of $7 billion dollars. What is the total debt of the government equal to
at the end of 2020?
a) $573 billion
b) $563 billion
Oc) $531 billion
d) $517 billion

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