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Which of the Following Statements Is True

Question 4

Multiple Choice

Which of the following statements is true?


A) A country cannot consume more than it produces.
B) If a country cannot borrow additional money, it must default on its loans.
C) A contractionary monetary policy that slows domestic investment can actually make servicing foreign debt more difficult.
D) Changes in exchange rates affect international trade, but they have little effect on a country's ability to service foreign debt.

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