If the government of Canada increased its budget deficit,then domestic investment
A)and net exports would rise.
B)would rise and net exports would fall.
C)would fall and net exports would rise.
D)and net exports would fall.

Question

Quizplus · Accepted Answer

An increase in the budget deficit typically leads to higher interest rates, which can crowd out domestic investment and appreciate the currency, reducing net exports.

If the Government of Canada Increased Its Budget Deficit,then Domestic