Final answer:
The correct answer is options A, B, and D. Protectionist measures by a country in recession can lead to reduced employment and current output in the export-focused industries of its trading partners, and may also affect the real exchange rate.
Step-by-step explanation:
When a country experiencing a recession imposes protectionist measures to preserve domestic jobs by sharply reducing the amount of goods imported, it directly affects the foreign economy that was exporting goods to that country. The decrease in exports to the protective country can lead to several potential impacts on the foreign economy.
Firstly, it may reduce the employment levels in the export sectors directly affected. Secondly, it could lead to a decrease in current output for these sectors, since their production scales down due to lowered demand. Further ramifications include changes to the real exchange rate that can occur as trade balances shift, and potentially an impact on real interest rates, though this is more indirect and depends on various factors, including monetary policy responses.
The correct option regarding the effects on the foreign economy when a country in recession imposes restrictive import measures is a combination of A) Employment, B) Current output, and possibly D) The real exchange rate.