Which of the following is not an affect of a higher federal budget deficit?

Question

Quizplus · Accepted Answer

A higher federal budget deficit typically leads to an increase in government borrowing, which puts upward pressure on interest rates. This makes option A true, as a higher real interest rate would result. Option B is false, as an increase in interest rates tends to cause a depreciation, rather than an appreciation, of the currency. Option C is false, as a higher budget deficit typically leads to a decrease in net exports, not an increase. Option D is true, as a fall in the price of foreign inputs would result from a weaker currency caused by the higher interest rates resulting from a higher budget deficit.

Which of the Following Is Not an Affect of a Higher