Under a fixed exchange-rate system and high capital mobility,a contraction in the domestic money supply leads to a:
A) Trade-account deficit and a capital-account surplus
B) Trade-account deficit and a capital-account deficit
C) Trade-account surplus and a capital-account surplus
D) Trade-account surplus and a capital-account deficit

Question

Quizplus · Accepted Answer

The Answer of Under a fixed exchange-rate system and high capital mobility,a contraction in the domestic money supply leads to a:
A) Trade-account deficit and a capital-account surplus
B) Trade-account deficit and a capital-account deficit
C) Trade-account surplus and a capital-account surplus
D) Trade-account surplus and a capital-account deficit

Under a Fixed Exchange-Rate System and High Capital Mobility,a Contraction