Assume that we have a trade deficit plus a recession. What could we do to correct this situation? We could lower interest rates so that business spending and household spending increases and our nominal exchange rate depreciates so we import less and export more. We could lower Government spending then less people are working and so we are exporting less We could raise interest rates so that business spending and household spending increases our exchange rate would appreciate and therefore we would import more (D) We could lower interest rates so that business spending and household spending increases and our exchange rate would appreciate and therefore we would import more