Question

When a change in interest rates impacts the international value of the dollar limiting the effectiveness of fiscal policy, it is due to

a. crowding out.
b. crowding in.
c. the slope of the AS curve.
d. the net export effect.
e. exogenous shocks.

Answer 1

The right answer for the question that is being asked and shown above is that: "c. the slope of the AS curve." When a change in interest rates impacts the international value of the dollar limiting the effectiveness of fiscal policy, it is due to c. the slope of the AS curve.