In the open economy,budget deficits decrease the demand for money,decrease interest rates,and lead to a decrease in the value of the dollar relative to other currencies.

Question

Quizplus · Accepted Answer

In an open economy, budget deficits typically increase the demand for money and interest rates, which can lead to an appreciation of the currency, not a decrease in its value.

In the Open Economy,budget Deficits Decrease the Demand for Money,decrease