Scenario 32-1

During a recession government revenues from the income tax fall and government transfers rise as the reduction in income and the rise in unemployment raise the number of people who qualify for benefits.
-Refer to Scenario 32-1. This change in the deficit causes the exchange rate to change. What does the change in the exchange rate do to net exports?

Question

Scenario 32-1
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During a recession government revenues from the income tax fall and government transfers rise as the reduction in income and the rise in unemployment raise the number of people who qualify for benefits.
-Refer to Scenario 32-1. This change in the deficit causes the exchange rate to change. What does the change in the exchange rate do to net exports?

Quizplus · Accepted Answer

The Answer of Scenario 32-1
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During a recession government revenues from the income tax fall and government transfers rise as the reduction in income and the rise in unemployment raise the number of people who qualify for benefits.
-Refer to Scenario 32-1. This change in the deficit causes the exchange rate to change. What does the change in the exchange rate do to net exports?

Scenario 32-1 ​

Scenario 32-1