Q. According to the Keynesians,
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(A)
An easy-fiscal tight-monetary policy reduces the trade deficit, such as what occurred during the 1980s
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(B)
An easy-fiscal tight-monetary policy mix affects the composition of output by encouraging imports of foreign goods and discouraging U.S. exports, as was experienced during the 1980s
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(C)
There was not a link between the rising government budgetary deficit and the rising trade deficit during the mid-1980s
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(D)
Budget deficits and trade deficits should not be a source of concern
✅ Correct Answer: (B)
An easy-fiscal tight-monetary policy mix affects the composition of output by encouraging imports of foreign goods and discouraging U.S. exports, as was experienced during the 1980s