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Questions 1:
A country implements policies that are expected to increase taxes by €100 million, increase government spending by €50 million, and reduce investments and private sector savings by €25 million each. As a result, the country’s current account balance is most likely to:
A、 decrease by €50 million.
B 、increase by €100 million.
C、 increase by €50 million.
Questions 2:
The tools used by central banks to implement monetary policy most likelyinclude:
A、 transfer payments.
B、 open market operations.
C、 raising or lowering income taxes
【Answer to question 2】B
B is correct. Central banks have three primary tools available to them: open market operations, setting the official policy rate, and reserve requirements
A is incorrect because transfer payments are a fiscal policy tool.
C is incorrect because raising or lowering income taxes is a part of fiscal policy, not monetary policy.
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