Question
How do budget deficits lead to trade deficits? a) Budget deficits lead to higher interest rates, which lead to net capital inflows, which lead to
How do budget deficits lead to trade deficits?
a) Budget deficits lead to higher interest rates, which lead to net capital inflows, which lead to currency appreciation, thus reducing net exports.
b) Budget deficits lead to lower interest rates, which lead to net capital inflows, which lead to currency appreciation, thus reducing net exports.
c) Budget deficits lead to higher interest rates, which lead to net capital outflows, which lead to currency appreciation, thus reducing net exports.
d) Budget deficits lead to higher interest rates, which lead to net capital inflows, which lead to currency depreciation, thus reducing net exports.
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started
Environmental Economics
Authors: Barry Field, Martha K Field
5th Edition
0073375764, 9780073375762
