The XX schedule shows how much
A) fiscal expansion is needed to hold the current account surplus at X as the currency is devalued by a given amount.
B) monetary expansion is needed to hold the current account surplus at X as the currency is devalued by a given amount.
C) fiscal expansion is needed to hold the current account surplus at X as the currency is evaluated by a given amount.
D) fiscal and monetary expansions are needed to hold the current account surplus at X as the currency is devalued by a given amount.
E) foreign funding is needed to hold the current account surplus at X as the currency is devalued by a given amount.

Question

Quizplus · Accepted Answer

The XX schedule shows the relationship between the currency devaluation and the current account balance. It indicates how much fiscal expansion is needed to maintain the current account surplus (represented by point X) after a given amount of currency devaluation. The schedule does not provide information about monetary policy, foreign funding or currency appreciation.

The XX Schedule Shows How Much