Consider the relationship between the Current Account and the Financial Account as described in the national income
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Question:
Consider the relationship between the Current Account and the Financial Account as described in the national income equation S - I = NX. If the government wanted to reduce the current account surplus, which of the following policy measures might it undertake?
a. Expansionary monetary or fiscal policy, i.e., Lower interest rates, or cut taxes and increase government spending.
b. Contractionary monetary or fiscal policy, i.e. Raise interest rates, or raise taxes and cut government spending.
Related Book For
Managerial Accounting
ISBN: 978-0078025518
2nd edition
Authors: Stacey Whitecotton, Robert Libby, Fred Phillips
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