Question

Under a fixed exchange rate system, a contractionary fiscal policy leads to a worsening in a nation’s balance-of-payments position if the resulting:

Accepted Answer

Capital-account deficit more than offsets the trade-account surplus

Answer

Trade-account deficit more than offsets the capital-account surplus

Answer

Trade-account deficit more than offsets the capital-account deficit

Answer

Capital-account deficit more than offsets the trade-account deficit

Q. Under a fixed exchange rate system, a contractionary fiscal policy leads to a worsening in a nation’s balance-of-payments position if the resulting:

Discusssion