If counter-cyclical fiscal policy is used to eliminate an inflationary gap, what effect will it have on

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If counter-cyclical fiscal policy is used to eliminate an inflationary gap, what effect will it have on interest rates and the exchange rate?

Both will fall.

Both will rise

Interest rates will rise and the exchange rate will full

Interest rates will fall and the exchange rate will rise.

Related Book For answer-question

Corporate Finance A Focused Approach

ISBN: 978-1305637108

6th edition

Authors: Michael C. Ehrhardt, Eugene F. Brigham

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Posted Date: Jan 11, 2024 03:11 AM

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If counter-cyclical fiscal policy is used to eliminate an inflationary gap, what effect will it have on

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Corporate Finance A Focused Approach

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