Don't upload image answer Budget deficits and trade deficits are linked by the fundamental equation (X-IM)-(S-1)-(G-T)TrueFalseQUESTION 7Expansionary fiscal policies also raise interest rates and make the currency appreciate. Higher interests attract morecapital inflow from abroad. As the currency appreciates, exports become more expensive, and with time, demand forexports will falter, possibly narrowing or even worsening the net exports position. Hence, international capital flows makefiscal policy more powerful than in a closed economy.TrueFalse

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ENGR.ECONOMIC ANALYSIS

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ISBN:9780190931919

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Chapter1: Making Economics Decisions

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