Exporters prefer monetary stimulus to fiscal stimulus because the lower interest rates associated with monetary stimulus tend to depreciate the currency. This depreciation makes a country's exports cheaper and more competitive abroad, thus potentially expanding both gross and net exports.

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Exporters Prefer

Question 53

Multiple Choice

Exporters prefer

A) monetary stimulus to fiscal stimulus because the higher interest rates associated with fiscal stimulus depreciate currencies and expand net and gross exports.
B) monetary stimulus to fiscal stimulus because the lower interest rates associated with monetary stimulus depreciate currencies and expand gross and net exports.
C) monetary stimulus to fiscal stimulus because the lower interest rates associated with monetary stimulus depreciate currencies and expand net exports if not necessarily gross exports.
D) fiscal stimulus to monetary stimulus because fiscal stimulus most usually is directed at the export markets in lieu of protectionist legislation.
E) none of the above.

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