QUESTION 13 A country with a fixed exchange rate has achieved external balance. To reduce unemployment, government spending increases. The expansionary fiscal policy will O A. deteriorate current account and financial account. O B. improve financial account and current account. O C. improve financial account and deteriorate current account. O D. improve current account and deteriorate financial account. QUESTION 14 The Pugelovian central bank intervenes in the foreign exchange market by selling $10 billion to prevent pnuts, the Pugelovian currency, from depreciating. If the central bank sterilises using an open market operation, the Pugelovian money supply will O A. be indeterminate. O B. increase. O C. decrease. O D. stay unchanged