223k views
1 vote
An expansionary fiscal policy financed by government borrowing will most likely lead to which of the following changes in the real interest rate and the value of the country's currency? (A) The real interest rate will increase, and the currency will appreciate. (B) The real interest rate will increase, and the currency will not change. (C) The real interest rate will not change, and the currency will not change. (D) The real interest rate will decrease, and the currency will depreciate. (E) The real interest rate will decrease, and the currency will appreciate.​

User Marius
by
8.4k points

1 Answer

4 votes

Answer:

D) The real interest rate will decrease, and the currency will depreciate.

User Marc Simon
by
7.2k points